Lessons I’ve Learned

I DIDN'T ALWAYS LIKE my retirement. After I quit my full-time job, I briefly went to work for another aerospace company. It seemed like the perfect arrangement for a retiree: just 16 hours a week, with the luxury of setting my own schedule.

But it was the same old pressure cooker environment that I’d wanted to get away from. Although I was working fewer hours, it didn’t feel like I was retired. Instead, it felt like the same old grind.

That’s when I realized a successful retirement was less about whether you worked or not, and more about doing things you enjoy. If I’d liked that part-time job, perhaps I would have felt like other folks, who call themselves retired and yet continue to work.

That was a key lesson I learned early in retirement. Here are four other important lessons I’ve learned in the years since:

1. Staying independent. In California, if you’re age 70 or older, you have to pass a written test to renew your driver’s license. Many seniors dread the test. When my mother took it, there were 30 questions and you can only miss three.

I was so proud of my mother, who at age 92 passed on her first try. My mother was a good driver in her later years. She had no physical or mental ailments that would keep her from driving. She valued her independence, and loved driving to her local grocery store or a nearby restaurant.

Except I made one big mistake.

After I retired and started spending more time with my mother, I drove her everywhere she wanted to go. By the time it dawned on me that I should let her drive to keep her driving skills sharp, it was too late. She no longer felt comfortable behind the wheel. She’d lost confidence and the feel for the road. She never drove again.

My mother used to walk a mile every day. But she had an injury that kept her from walking for a couple of months. After she recovered, she was never able to walk that far again. Her favorite afternoon walk was gone for good.

The saying “use it or lose it” is especially applicable to the elderly. As you get older, it’s so easy to lose something for good, even if you stop doing it for just a short while. If you’re consistent in your daily routine, you’re more likely to remain independent.

2. Buying Series I savings bonds. When inflation-protected savings bonds were yielding 9.62% in 2022, I thought about purchasing some through TreasuryDirect.gov. As a retiree, I’m always looking for a good, safe investment return. But I was concerned about the fixed rate being 0%.

The fixed rate is one of two components of a Series I bond’s yield, and it stays the same throughout the life of the bond. The other component is a variable rate that changes every six months based on inflation. With a fixed rate at 0%, you could never beat inflation. But if the fixed rate is above 0%, you’re guaranteed to beat inflation, at least before taxes. That’s why today’s I bond rate of 5.27%, which includes a fixed rate of 1.3%, looks so appealing.

If you had purchased an I bond back in 2022, when it was yielding 9.62% but with a 0% fixed rate, today’s yield would be just 3.94%—a lot less than the current 5.27% yield. If you were lucky enough to have purchased an I bond back in September 1998, when the fixed rate was 3.4%, you’d be earning a whopping 7.41%.

The lesson: If you’re thinking about buying I bonds, it’s important to pay close attention to the fixed rate, and not to be too enamored of the current inflation-driven nominal yield. There are other disadvantages to I bonds: You can’t spend the income if you need it. Although the income is earned from the first day you buy, you don’t have access to that interest until you redeem your bonds.

Another drawback: You have to wait at least a year before selling. Moreover, if you sell before five years, you lose the last three months of interest. You should also be aware that $10,000 is the maximum you can purchase annually per person. The IRS, however, allows you to purchase an additional $5,000 with your tax refund.

3. Choosing the right Medicare plan. About one in three Medicare beneficiaries use an insurance agent or broker to choose a Medicare plan. If you’re among them, you should be aware of a key conflict of interest.

Commonwealth Fund conducted focus groups with brokers and found most are paid more—and sometimes a lot more—to enroll folks in a Medicare Advantage plan, rather than a Medigap plan that supplements traditional Medicare. The brokers in the focus group also said most Medicare Part D drug plans don’t offer commissions and, among those that do, it isn’t much money. Brokers don’t receive any money for enrolling someone in traditional Medicare.

It was also revealed that the commission structure on Medigap plans encourages agents and brokers to sell high-premium plans, such as plans G and F, that cover most of the costs that aren't paid by traditional Medicare. Plans like K and L, with lower premiums but also limits on out-of-pocket expenses, might be more appropriate for someone on a shoestring budget—but these plans also tend to pay smaller commissions to insurance brokers and agents. When these salespeople were asked what they’d choose for themselves, most said they’d pick traditional Medicare.

4. Staying positive. Today, I’m enjoying retirement immensely. But it’s not always easy growing old. There are more health issues to contend with. As you age, you lose more family members and friends. Then there’s the stark reality that you might have to live alone for some part of your retirement.

I read a New York Times article by Melissa Kirsch where she asked her readers to submit the best changes to their routines in 2023. One reader responded: “Each week this year I wrote something that happened that I was grateful for on a slip of paper and put it into a jar.”

I thought that was a great way to try to stay positive when things aren’t going your way. If we write down some of the good things in our life that we tend to forget, we can revisit them during difficult times. We might also put the jar where we can see it, so it’s a constant reminder of all the positive things in our life.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor's degree in history and an MBA. A self-described "humble investor," he likes reading historical novels and about personal finance. Check out his earlier articles and follow him on X (Twitter) @DMFrie.

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