Some Financial Observations From our First Full Calendar Year in Retirement


I retired in late 2018, so 2019 was the first full calendar year in “retirement” for my wife and I. I’ve written about my decision to retire and some things I’ve been doing since then.

Because this is a blog and not a magazine (although you may not think so based on the types of articles I write), I like to occasionally give you a peek at the man behind the curtain. I can assure you; he’s not that impressive, just a “pretty average, financially conservative guy who writes about the realities of planning and living in retirement from a Christian stewardship perspective.”

Since it’s been over a year since I retired, I thought I’d give you an update about the financial side of things. This post is not a “full disclosure,” just an overview of our experiences and some observations after the first full year. There were no big surprises; in fact, things are going along much as planned.


I don’t like paying taxes any more than anyone else, but managing them in retirement hasn’t been all that difficult. My retirement savings are in a taxable IRA (heavy sigh). I sometimes wish I had made more use of Roth accounts and perhaps even some cash-value life insurance. I withdraw money from my IRA each month, and Fidelity holds a portion of it for state and federal taxes. I never see it, but I know it’s going out the door.

The IRS requires Fidelity to withhold federal income tax at a rate of 10%. Still, I have set withholding a little higher since I don’t have any taxes withheld from our Social Security benefits, and a portion of them are taxable. That may come as a surprise to you, but up to 85% of your Social Security benefits may be taxed if your total income is more than $34,000 (individual) or $44,000 (couple). And yes, Social Security counts toward total income.

My goal is simple: I don’t expect a big refund, nor to I want to write a check in 2020 to pay more 2019 tax.

I have worked on my 2019 income taxes. I don’t enjoy it, but I don’t dislike it either—it’s just something I have to do. As part of this exercise, I have to look through various account records to verify what I spent and gave in certain areas (we can still itemize our deductions, despite the $27,000 standard deduction for my wife and I). I also spent some time looking at our budget, income, taxes, etc. I was curious about what our tax situation would look like after our first full year in retirement.

Lots of us are enjoying lower tax rates. Our marginal rate is 22%, but our actual tax rate (which is an average) will be about 10.7%. Not bad, but one has to wonder how long rates will stay so low.

I’m guessing that most of the readers of this blog have adjusted gross income that will put them in the 22 to 24% marginal rate, but after deductions and credits, they will end up paying much less.


Giving in retirement isn’t that hard. I had tried to keep our giving at the same level as before I retired. Sure, it takes a bite out of our disposable income, but I want to continue to give for as long as I can. I treat giving just like any other planned expense. I put it first; then, I know what I’ll have left to spend.

Our giving helped us to itemize deductions on our income tax returns. So, we still realize some tax benefits from our charitable contributions. (Of course, we would make them regardless.)

A lot of our giving is on auto-pilot. Except for our church tithes and offerings and occasional ad hoc gifts, I set up our regular giving to happen each month. I use the “EasyTithe” app to make church contributions. (I fire it up on Sunday morning when they are passing the baskets around—I like to do it then, as part of the Sunday service.)


You may have noticed that in 2019, the Dow Jones Industrial Average gained about 25%, including dividends. That was a great blessing to many, especially new retirees like us. We can ill-afford a significant stock market crash in the early years of retirement (what some call “sequence of returns risk”).

But, despite the skyrocketing stock market, if you’re a retiree living off savings and some Social Security like me, I advise caution. Rather than having more exposure to stocks to capture more substantial returns, I have become more and more defensive.

Over the last five years, I have moved from a moderately aggressive (60% stocks/40% bonds and cash) to a somewhat conservative (35% stocks/65% bonds and cash) asset allocation.

My relatively conservative and diversified portfolio returned almost 10% last year. As expected, that lagged the stock market but was very close to a 40% stocks/60% bonds index performance benchmark.

My focus is on income, so I don’t capture all the markets’ upside. But I don’t lose as much during down years. In 2018, which was one of the worst in the last ten years for the markets, the S&P 500 lost 6.24% (4.75% including dividends). But my portfolio was down only 1.5%, and with dividends and interest of over 3%, I finished in positive territory (just barely).

I would be surprised if 2020 is even close to a repeat of 2019. It may look more like 2018 based on the volatility we’ve already seen. With stock prices at all-time highs, I don’t plan to tinker with my investments. Remaining conservative and collecting dividends and interest, just like I did in 2018 and 2019, is the best strategy for us right now.


I have been cautious about my savings withdrawal amounts. “How much can I ‘safely’ withdraw from retirement savings in retirement?” is a critical question that everyone needs to answer. Most of us know about the 4% guideline, which says start by taking 4% of your retirement assets in the first year of retirement and after that increase that amount by inflation each year. My withdrawals have been closer to 3%, and many retirement professionals would urge you to keep it as low as possible to start. They also advise making adjustments based on changing economic conditions rather than sticking with a fixed percentage.

Social Security is providing us with what we expected. We started receiving Social Security benefits at age 66. If we had waited until age 70 to receive the highest benefit possible, that might have come in handy when we’re in our 80s or 90s.

In 2018, congress eliminated the “file and suspend” option (which we planned to take advantage of). And we don’t qualify for the restricted application option (which is still available to those who were born before 1954). Therefore, we opted to file for benefits at age 66 to receive my full retirement age (FRA) benefit and also the spousal benefit (which is 50% of mine) now rather than wait four years. (Basic breakeven analysis works well in such situations.)

Social security benefits are a good portion of our retirement income; they will be for most people. The payments show up in my bank account like clockwork—it’s the same account where I deposit my withdrawals from our IRA savings. Those two make up our twice-monthly “paychecks,” which we spend just like we did before. However, I transfer some to saving every month (see next item).

The verdict is still out on annuities. I have not ruled out purchasing an income annuity to expand my “guaranteed” income floor. Unfortunately, as I understand it, there are now no companies that offer an inflation-adjusted immediate income annuity, and I’m still not sold on fixed-index or variable annuities as a solution.


I still maintain a non-retirement savings account, with several “virtual” saving accounts underneath it. Saving is easy—I transfer money from my monthly “paychecks” from retirement savings and Social Security to my savings account. Then I can assign sums to the virtual accounts and track them in my money management software. These savings are mainly for real estate taxes, vacations, medical expenses, and an emergency fund.

If you’re wondering why I would have an emergency fund, here’s the deal: If my car blows up, or I need a new roof or have an unexpected medical expense, I would prefer not to withdraw additional money from retirement savings (and pay the taxes on it), nor do I want to borrow the money to cover them. Need I say more?


Gratefully, neither my wife nor I had any major medical problems last year. Therefore, I don’t know exactly how well our Medicare insurance would have played out in such situations (i.e., how much out-of-pocket expense we would have, if any).

The insurance itself isn’t “cheap.” Medicare Part A is free, but Parts B, C, and D aren’t. Basic Medicare (Parts A and B) has deductibles and copays, plus there’s no out-of-pocket limit. So, we have a Medicare Supplement (aka, “Medigap”) policy. We also have a Part D plan for prescriptions and dental and vision plans.

We pay monthly premiums for these, except Part A, and they add up. The basic Medicare Part B premium will be $144 per person in 2020. If you have an income of more than $85,000, you will pay $25 to $30 more.

Medicare supplement plans aren’t cheap either. We paid about $150 each for ours last year (for a Plan F policy). Part D plans cost around $30 a month (in 2019, ours were $28 each). (They also base Part D premiums on income.) So, all-in, we paid about $600 a month for health insurance in 2019, which is close to what I expected. We also had some out-of-pocket medical expenses for prescriptions, which we expected.

You can check out the medicare premium schedule on

Long term care

I remain conflicted about Long Term Care Insurance. My wife and I both have policies, and hers is a little higher-priced than mine.

Together, these two policies are costing us a tidy sum in monthly premiums; and, along with Medicare and other insurance costs, comprise our largest expenses in retirement.

Because of the high cost—and the likelihood of cost increases—I have questioned whether the LTC policies are essential. I am concerned about long-term affordability. Therefore, I plan to reevaluate them this year.

There are a lot of factors to consider, which I will discuss in a future article.


We have lived in the same house for about 15 years. It is paid for, and we have made some improvements and upgrades to it. It is a single-story, ranch-style home, which is nice to have since we are getting older. We are just a few minutes from shopping, restaurants, theaters, and our church.

The only “downside” is that it is a larger home with a yard and lots of trees that require a lot of upkeep. Although we are probably never going to move off the Island of Whereintheworldarewe to play golf and lounge on the beach all day, we sometimes discuss downsizing, not so much to a less expensive house, but something that would be less to maintain.

We occasionally look here and there, but so far, we have found nothing we like better than what we have. Since we’re not in any big hurry, we’re staying put for now. Even if we moved, we wouldn’t go too far. Our goal would be to keep close to church, friends, and our grown children and grandchildren who also live in the area.

Pressing on

I can honestly say that my wife and I are enjoying our time in retirement so far. We are finding the right mix of “work” and “leisure,” but with more emphasis on the former right now. It is such a joy and privilege to have the flexibility to serve God and others and in our local church, more than we could before. It’s an exciting season of life, but we know it won’t last forever. That’s why, “We must work the works of him who sent me while it is day; night is coming, when no one can work.” (John 9:4, ESV)


👋 Hi, I’m Chris Cagle, the founder of Retirement Stewardship, a blog that focuses on the various aspects of retirement from a Christian stewardship perspective (1 Peter 4:10).

I write as a retiree who is dealing with the things I write about. I base most of the articles on my research and experience applying it to my situation and how it might apply to yours.

If you’re new here, check out the site introduction for an overview. You can also learn more about me.


My Books

Redeeming Retirement: A Practical Guide to Catch Up (2021)
The Minister’s Retirement (2020)
Reimagine Retirement: Planning and Living for the Glory of God (2019)