As senior financial planner for T. Rowe Price, Fahlund, 69, has been the company’s public face for retirement planning services. Now, she and her husband, who is retired, have bought a recreational vehicle, and she’ll retire in June.
After many years spent thinking about retirement for clients, Fahlund talked about planning her own career exit:
QUESTION: How did you know it was time to go?
ANSWER: I really had been practicing retirement throughout my 60s, both emotionally and financially. During that time I would say we were in pretty good shape financially, but emotionally, I was not ready to leave. My husband was fine with whatever I wanted to do and wasn’t nagging or pushing me to go, so I had the pleasure of deciding on my own terms. Then I lost several friends last year, one of them very suddenly at the age of 48. She never got the opportunity to retire, and I started to think that if it was within my grasp, I should take advantage.
Q: What about the nest egg? How did you know you have enough?
A: Knowing all that I know, I was concerned that I would be overanxious about that. I don’t know what snapped inside, but I’m much more calm about it now. We hit “our number” about seven years ago, where projected Social Security plus an initial 4 percent portfolio withdrawal rate would equal something in the neighborhood of 75 percent of current salary. And if you wait until age 70 to start withdrawals, you can withdraw 5 percent. So we’ve been able to play a bit (by suspending retirement contributions and using the money for travel and other luxuries) while continuing to work while the nest egg compounds.
Q: Have you begun collecting Social Security?
A: We began some spousal benefits at full retirement age. We both decided to wait until age 70 to collect our delayed retirement credits.
Q: Do you have long-term care insurance?
A: Yes. We bought it in our 50s. To afford the premium, we agreed to a 365-day elimination period, so we’ll take a hit for 12 months if we need it. And if we need to, we could stop the inflation increases to lower the premium more.