Financial Planning - Reality Check

So now I'm into my 4th month of retirement.  The first month was a little scary because everything looked good on paper but I had to wait and see the process unfold before I could feel secure that the big change was actually real.  Because my retirement date was December 1, 2011, I knew taxes would take a big bite out of my income received because I chose to have my backdrop payment in addition to my pre-retirement income in the same year.  2012 will be much better.

As I suspected, there was not enough taxes withheld and I had a larger than expected tax bill for 2011.  There was no state tax taken out so I knew that would have to be paid also.  I am currently in the process of having my calculations checked by a professional accountant to be sure I am only paying what I owe and no more.  After my large tax bill is paid, I will rest easier.  There are still a few unsettled issues concerning a balance of security between my husband's income and my new income but I'm sure we will have things worked out in the near future.  I believe we have a gap in life insurance coverage and are in process of shopping for a good affordable policy.

I don't have any problem managing my bills and am able to save some money into an emergency fund each month.  I paid a couple years ahead for my Health Savings Account so that's not a worry.  My monthly health insurance premium is much higher than when I was working but I understand it is much less than the average retiree.  An added benefit I am seeing is an improvement in my health since I retired which means less medicine because of less stress from job-related traveling, eating out and politics!  I have also had more time for exercise and meal planning which has already made a significant difference by lowering my weight and blood sugars. 

I have been able to put some more money into the lower floor remodeling.  I have purchased six bookcases and a wall of Rubbermaid wire shelving for storage.  The only items left to purchase over the next few months are some additional cabinets for my hobby area, another area rug, and a sofa.  A few unexpected expenses have come up which included a new water filter system to replace the old distiller and some body work done on my new car from hitting a turkey. Time to slow down on the spending, get caught up, and then continue to move forward with home improvements later in the year.  I think there will be more fishing and gardening with less shopping in the next quarter!

A large portion of my backdrop money was not taxed and was instead transferred into my deferred compensation account already established that contained my investment savings.  This larger amount has shown a significant increase in January and February which I watch carefully.  I am learning more about my investment portfolio each week and have confidence that it is the best place for my money. The management company provides many tools for my use. Here are some sites that are provided for me:

http://www.modeferredcomp.org/
https://www.mosers.org/en.aspx

I think this first year of retirement income will be a good learning experience.  Now that all the backdrop money is put in the appropriate place, the investments are working for my future and I have only my actual monthly pension to live on, I can finally have a Reality Check of financial security.  It will only be as good as I make it.   I am fortunate to be part of a large public group with plenty of tools and resources to help me in my Financial Planning.