How's Your Retirement (or Planning) Going?

My editing time expired, so I'm adding this resource page link. If anyone can find a link for watching the program, please add it.

House expense is the largest

By retirement, you should owe nothing on the house. Property Taxes will be your biggest concern for a while

vehicles and their maintenance.

These are something you need to budget. You should also budget major repairs to your house in the event insurance does not cover something.

Medical catastrophes can wipe one out. So true. Long Term Disability Insurance is the only way to go. If you never need it, that would be a blessing. If you did need it, it would make the difference to your legacy.

Your savings needs to provide you with an income until you die. Having paid the house off, you should be spending less each month. Spending habits change in retirement. Your options are of you own choosing.

Due to uncontrollable circumstances I live in a house that still has about 26 years left on the mortgage. A "paid-off" house isn't in the cards for now. (And I don't play the Lottery.)

Many people got "caught" with a level of expenditures, etc. when their retirement funds "crashed." The program is about how traditional pensions went away, managed funds were susceptible to markets, and many weren't aware of the exposure they had. And financial "planners" (really, brokers) have no fiduciary responsibility to their clients.

I am figuring that I will insure my wife for a few million and then just let her live her life the way she wants.

Given her life choices and lack of stress management the odds are I will retire wealthy and not have to share it either.

The next option might be to just run a few internet investment scams. Either I end up wealthy or I end up a ward of the state. Either way I will live better than most people who retire and not have to work unless I want too.

And what of the in-between, more likely option -- status quo? And how much might those premiums for millions in insurance add up to over the years?

I've got about 30 more years working ahead of me if I follow the typical family average which in that time I have very high odds that there could be an oil well on our property by then or my stocks will go back up.

As far as million dollar life insurance goes right now that's about $100 a month or less than 10% of what my wife wastes out of her pay in a month as is.

A number of years ago a financial planner I talked to pointed out that you can't 'eat' the equity in your home; that's wealth that sits there doing nothing. With the mortgage interest IRS deduction and low mortgage rates, he said I'd be better off keeping my mortgage and investing the 'equity' into some moderately safe instrument like corporate bonds -- something that over the long term typically pays 4 or 5 % above the mortgage rate. So for now I have a mortgage that's fairly affordable; in fact I refinanced earlier this year and with the lower interest rate and by shopping for cheaper insurance, I'm saving over $200 month. That's not huge, but it helps.

I'm lucky that I can still do consulting work part time - and I hope to continue doing so indefinitely. I enjoy the work, the pay is good, and I can usually adjust my hours and schedule to take some time off when I want to. With this arrangement I may never retire - and be happy not to.

I converted my 401K into a plan that will pay me a fixed amount per month starting next year. I'll use it if I need it, but I think I might be able to just re-invest the money. I'm not wealthy by anyone's definition, but by paying off my credit card bills when they arrive and by living frugally, I think I can maintain my lifestyle for a long time - barring some unforeseen illness, of course.

Sounds good Usbport. Prudent planning.

I would probably agree with the mortgage advice. My parents never had a mortgage. My Dad bought a one-room house after the war (II), became a carpenter and "added" to the house as he could afford to. Of course, the first few years of a mortgage, are almost all interest, which does little to build assets of any kind. The deduction can lower taxes, but usually not enough for any significant investments. And, most Americans use tax refunds for purposes other than saving. Sadly, in this day and time, if wisely used, it is to pay off credit card debts, etc. Most have these debts.

Back in the '80's, I think around 1987, when the stock market took a dive, our IRA's (as mutual funds) were young, but my wife and I moved the assets from "managed" options, into the fixed, money-market fund, which I guess is an indexed fund. We left them there from then on. They never built to much because we never put more money in them after a couple of years. We did so to lower our taxes those couple of years. But we didn't lose either.

It's the illness expenses that I wonder about. I have no heirs, but I have thought for a couple of years now about something like a Trust that might protect the assets from a medical wipe out. I'd rather leave any leftovers to some philanthropic organization than the state. I have never really investigated it yet. I most certainly don't want to throw them in the medical industry's kitty. (Apologies to any doctors and nurses out there.)

I retire every night around 11

Ar, ar, ar,...I mean, are you solvent at the time?

actually I guess for me it's more a question of choosing to work or not. today my answer is work is purpose and I enjoy it.

I retired for 18 months, 15 years ago. I had fun, traveled, played golf, boated, went 4 wheeling, went to the race track (thoroughbred) every day during the entire season.

Then I got married.........................................................................................

Now, at age 66, I'm still working.............................................................................and still have a house payment.

Oh, we have one house and some other properties free and clear, but I'm not inclined to sell anything, just yet.

Frankly, I don't know what I'd do if I retired anyway.

I've heard that quite often in my life. I don't remember if I posted it or not somewhere along the line, but my Dad was retired for a couple of years, had done all the "fun" things he wanted and told my Mom he thought he was ready to go back to work. Work is a lifelong habit that is hard to shake. Work is probably not the right word. Being active may be more appropriate. But purpose is tied up in it, too.

If you have properties, plural, free and clear, despite the advice about mortgages being better than the value the real estate lying dormant, I'd hang on to them unless you need to convert them to cash. As they say, "there ain't no more land being made."

In lyn's case, "work" is definitely not the right word.

His "work", is going to a quiet place, getting paid for it, and playing on CR4 without being bothered with family stuff.

"Frankly, I don't know what I'd do if I retired anyway."

Volunteer to moderate CR4?

Just a thought.

I am nearly 58 and planning to retire in about 12 months time so I have been doing the final icing on the retirement cake. I started planning for retirement at age 17 when I joined the Royal Australian Navy. It was compulsory to write a will and consider your career in the navy and afterwards. A lot of emphasis was put on DFRDB. This is short hand for Defence Force Retirement and Death Benefits. It struck a cord and so I started planning. Plan 1 was the twenty year plan. 20 years in the navy would get you a pension that was about 35-40% of you pay off salary. I failed that. I had a work place injury that meant I couldn't do marine engineering anymore. To make it more interesting I married and had kids. Before the marriage and long before the kids I started investing in property. It is amazing. People want to live indoors.

Here in the land of Oz (Australia) we also have compulsory superannuation. It is a bit like the USA's 401k but in addition to our payment our employer also contributes to it and so does the government. This then becomes a fund to replace/supplement the government funded old age pension scheme.

Beginning with the end in mind seems to be the trick.

Things sound tough in the land of "the Free and the Brave".

BAB

Military careers seem to be good for early retirement. (At least in democratic systems.) Retirees then can start a second career at at a young enough age where age is less a factor.

I guess the compulsory superannuation is a bit like Social Security in the States. Yes, things are tough for a lot of people who've lost pensions and retirement funds.

I am not retired yet. My country just raised the retirement age from 65 to 67 and when I will get that old, it probably will be closer to or over 70.

Nice to look forward to. I moved to a place with sun (less heating costs) less stress and were are no property taxes due. The power bill for the AC, my solar takes care of that.

Here I will get a pension ( I can make a choice: 80% @ 63 years or 100% @ 65)

It is not a lot I will get, but when my other pension kicks in also I will be able to survive with it.

Important are also the medical costs. That why I find the US very difficult.

A friend of mine pays $12,000.00 property tax on a canal in Florida. I consider this a salary. I live on a canal with clear water elsewhere and my costs go to more appreciable items. There is still room here.

In the land of Oz we have Medicare so that health expenses are not that onerous for those who need it.

http://en.wikipedia.org/wiki/Medicare_(Australia)

BAB

I'm supposed to go see my broker next week for a financial analysis, so I worked this up:

I turn 70 in two weeks. My wife is turning 65, and going on Social Security. The rules say she gets half what I get, so $2400 + $1200 is $3600 per month. Add a small pension* of $480, and that's $4,000 a month for not working.

*As an aside, sometimes it pays to be on management's bad side. I was the only white male over 40 who was not a vice president at my previous PR agency. When they bought the agency from Y&R, only officers were allowed to use their pension fund monies to buy in. It all went south, the agency folded, all the VPs lost their pensions, but I still have mine. Yuk, yuk.

When I turn 70 1/2, I have to take 5% of my 401K, so that will be..um, err...carry the 1...another $1500-$2000 a month, depending on the markets. Now we're up to $5500 a month.

In less than 18 months, the house, BMWs and the 300C pay off, so no loans. No credit cards. No more $980 a month for Blue Cross, because we'll both be on Medicare and a supplemental. And we'll dodge the Obamacare bullet.

I'm still working two jobs--a day job (for the Blue Cross insurance) and my PR agency, so when the house pays off I'll quit one of them. Pity, too--I'm making more money now than I've ever made in my whole life and I hate to give it up. But it's time to cut back to working half time and lying on a beach somewhere.

It doesn't sound like income is going to be a problem for you, ever.

My wife died 33 months ago. Not only did I lose my best friend in life, but I lost her income, too. "Our" monthly income got cut in half immediately. I was making too much to collect any of her SS and her pension went away, because we calculated long ago, when she was forced into retirement (and not a full one at that) by Chevron when they took over Gulf Oil, that it would take until she was 84 for the difference in higher payments, by waiting, to catch up to the money in hand at the lower rate at earlier age of claim.

If she were still alive our prospects for retirement would be much better than mine are today. Money comes and goes. A "one and only" lifelong companion is rare. I miss her, not so much the money.

I'm retired several years and am doing ok, as long as I don't get sick, or sued, or outlive my money....My Health insurance went to over 1k a month and that's with no health problems, I had to discontinue coverage, now I just have to make it a couple of years and I get medicare....I'm hoping the AHCP(Obamacare) will offer an affordable option...I gave up owning a house, it's just too much time and expense to keep it up....Now I live in a condo on the beach and my time is spent doing whatever happens to appeal to me at the moment...

I hate you.

The health care system is really screwed up in the U.S., IMO. And I don't think the AHC act is the best solution. $1k a month is outrageous.

Am 74. Still work full time.

GA jt,

I like your perspective of not being so dainty with life and what happens in it. I read a statement once that went like this, "most of the things we regret in life aren't things we've done but things we haven't done."

Retiring doesn't have anything to do with age, it has to do with money. I know a young lady here in Wichita, Kansas who graduated from Wichita State University with a Business Administration Degree and that evening she had her "freedom party'. She'll never have a job working for someone else because she listened to some people who gave her a different option for income rather than "carrying buckets". Check out Robert Kiyosaki's "Parable of the Pipeline". She built a "pipeline" income with the LIFE Business. She now has time and money freedom.

This young lady by the name of Jessica isn't idle, she is pursuing her dream and passion on her time frame, discipline and drive. She just isn't tied down with obligations of a job or lack of money.

Part of our problem in the United States is that so many people have a "lack" mentality. Rather than figuring out how to make a better income, they just look at what they can cut out of their lifestyle. That's wrong thinking. Why would we want to shrink what we want in life rather than figure out how to increase our income and fulfill those dreams we have. Read "The Magic of Thinking Big" by David Schwartz.

Anyone of any age can increase their capability for income without selling their lives to a company or business that controls their lives. DEFINE, LEARN, DO.

The quote on the bottom of the page was appropos to the Post. Too often we just do what everyone else was doing and we get the same miserable results.

"Do not follow where the path may lead. Go instead where there is no path and leave a trail." -- Ralph Waldo Emerson

I forgot to mention that this young lady in the illustraton was 22 years old when she became financially free with no debt and residual income providing for her needs and dreams. Imagine the number of years she has to be living a living a life of priority rather than obligation, which is where most of us are.

I appreciate both of your posts. But logic would say the majority of people, can't become wealthy without limitation of expenditure, if wealth is defined by freedom from obligation. Poverty is defined by a minimal standard of living. Maybe I'm not thinking correctly, but I think the money supply dictates how much is available divided by the number of non-wealthy people. (And that for certain depends on how one defines wealth.) And how it is concentrated determines and limits the flow. If a majority of people could become "wealthy" it would likely appear to be the redistribution of wealth that so many abhor. The share of income of the top 10% by population varies from 60% to 21.9% depending on country. (It's a bit surprising since the U.S. takes such a rap for having a disparity in wealth distribution.) Assuming a large portion of income of wealthy people is held onto, the available money supply is, practically, limited to the financial activities/purchases of the other 90%. That means a money supply of ~78%-40% depending on country. Then that is reduced by how many of that population are potential customers for a given product or service.

Money flow that matters to individual business success occurs from the number of individuals who qualify as consumers or customers for the service or product being offered. A wealthy customer spends the same amount for the product/service as a lower income individual. Because of the concentration of wealth, that means the available supply for any individual business is limited to that pool of customers.

That said, I'm all for entrepreneurship and creative thinking -- dreaming and acting on those dreams. But there are statistics for business failure that are relevant. I don't necessarily agree with all the reasons for failure listed at that link. I am also somewhat puzzled that under the heading, Businesses with Best Rate of Success After Fifth Year, Religious organizations is #1. How did religious organizations get classified as a business? I suppose it must refer to business that deal in religious items; not religious institutions themselves.

Business and income are definitely relevant to eventual retirement. For most of us, planning and arranging expenditures is also part of that equation. At a certain age we have a tally of both that in all likelihood will be what it is for the remainder of one's life.

Thanks facilitiesmgr that's great (not had one for a while, or a GA ) Much appreciated.

jt.

An Irishman goes to the registrar and says, I want to change my name please.

Are you sure? asks the registrar. Yes, certain he says. Ok well, whats your name?

Patrick, Patrich Shithouse he replies.

And what name would you like? asks the registrar.

Michael, he replies.

And that, is a part of retirement I was anticipating.

I meant WASN'T.

I officially retired in 2007 when I was basically forced out due to downsizing. I'm only 68 now but we live a comfortable life. When I was forced out I cashed in all my stock options I had earned over the years, just before the company stock took a dive along with everyone else. That combined with a very nice severance package, and a year of consulting alowed us to wait until I was 66 to start collecting my pensions and SS. With my wife's 1/2 of my SS, and the pensions we live on about 60% of what I was making when I retired in 2007. We paid the house off in 1996, and have always purchased cars with cash. We live within our means and always have...even put 3 kids though college without them taking out loans. It can be done...takes some planning and not living beyond your means.

Aussie boy In the land of Oz we have Medicare so that health expenses are not that onerous for those who need it.

In the US we allow the lawyers to double the expense of health care. That is one huge expense Obama has ignored. Instead it has tripled the paperwork to reduce cost. That is pretzel logic!

I'll probably never be rich, but I'll be working at something until the day I die.

No debt but the mortgage, and slowly building equity in the house, with my own hands.

Health is #1, even though I have some bad habits.

Catastrophic illness will wipe out the best laid plans.

Thanks to everyone who posted so far.

I have mixed feelings about retiring without my companion. Work is certainly more of a chore than it was, so not having to show up at some place to do something I'm not so crazy about (and haven't been for the last 25 years or so) would be a relief of sorts. But a bunch of "free" time without my companion doesn't appeal to me either. No matter, right now the die is cast that I have to work. I wouldn't feel comfortable financially to retire any time soon.

Being "retired" doesn't mean not active. It means you choose how you use your time and for what purpose.

A young 33 year old man that I mentor with is "retired" but he certainly isn't lazy or not active. It's just that now he pursues his purpose and mission in life, that of helping males become men who will be great husbands and who will become great dads to his children. Cody Newton did this through developing a very substantial passive, residual flow of income through a non-traditional business model, the LIFE Business.

Imagine the time he has left in his life to have significant impact in people's lives since he isn't tied to a job. He is "living a life of priority, not obligation".

Being retired has nothing to do with age, it has to do with money. Otherwise you wouldn't see so many older people greeting at Wal Mart, Dillons, etc. or bagging groceries. Some people do it just to stay active but most are there because they don't have enough money. The sad thing is, is that generation is known for what? Being hard-working and diligent. They worked hard at something that provided a residual flow of income that was subject to a lot of variables outside of their control and therefore when those conditions changed they are left in a position where what they had planned for went in the crapper, and they're back in the workforce.

Agreed.

My musing about retiring was based on the idea that the ability to retire is directly related to money -- that and overhead. Overhead can't always be adjusted at will, but planning can, hopefully, provide a practical opportunity to reduce it. I guess the ultimate reduction would be to become a wandering ________. (Fill in the blank. Hobo, minstrel, vagrant, Caine, gypsy, mendicant, magician, healer, rainmaker, storyteller, juggler, puppeteer, mystery shopper, dowser, fortune teller, Joseph...)

Just in case my planning all goes belly up there's always Plan B....

If you can hold out long enough, the "medical" qualifier may not be needed. Or you could move to one of the states where it is legal for recreational use.

...I was suggesting producing instructional videos...that was just a well produced mellow example.