I've never understood the mindset of raking in more and more money just for the sake of having more and more money. It is true, money can't buy happiness. However, it's also true that a certain amount of money yields the opportunity to be able to afford things that keep us living life and affording some indulgences that add to the quality of life. I can only speak to my own perspective to where that middle ground is- not amassing wealth or hoarding of money for money's sake, and having enough to live a comfortable life with some creature comforts, experiences, legacy, and bring enjoyment and peace of mind.
I think most of my readers, give or take a few years, are about in the same age group I am and might be in your retirement planning mode too. I know some of you have made the leap and I like learning from your wisdom and experience on what worked and what you might alter. I want money to do a few things for me. Sitting and growing without boundaries is not one of them. Here's my list for now of what I want our money to do for us now through retirement.
- to last to cover our living expenses proportionate to how we live now regardless of how long we're alive. Of course how we can live at 62 will be different at 92, but I want to know our daily needs are met well.
- used to cover health insurance and expenses at minimally our current coverage
- be able to still give to people, causes, and organizations that can do good things with our and others money collectively.
- used to give generously to people we love
- be flexible enough that we can hire people with better skills, talents, and vision to get needed projects done that really are beyond our DIY ability.
- along these same lines, be able to buy higher quality items that last, rather than inexpensive ones that need frequent replacement.
- be enough to travel, while maybe not at the Ritz, but not requiring hostel stays. (Though I think hostels aimed at older adults might be an interesting experience.)
- pursue hobbies that we might not have time for now, but will post retirement even if they require additional expense or investment. For DH, that's likely golfing and water toys. I really don't know what that might be for me, but want to afford to find out.
I feel like both DH and I had this. Had we really been in a hard place at different places in our life, we had family that no doubt would have been able to let us live with them or provide employment temporarily. (emphasis on temporary) My husband leaving a well paid but dangerous job shortly after DS was born to go to a commissioned base job was a risk we took. Draining our savings to put a huge down payment on our house because we couldn't get a regular mortgage without doing so, meant close to nothing in the bank should we have had a major expenses elsewhere, was a risk. My going to part time employment and then going back to school, and the high tuition that came with it, were others. This all panned out, but may not have. Health care and being a safety net for our kids is my where I worry the most about the timing of my retirement, right or wrong.
What do you want your money to do for you? Do you have parts of your plan that worry you more than others?
I want to have enough set aside to live comfortably. We will most likely not live like we do now because we will change our surroundings and scale down to a much smaller home.
ReplyDeleteCovid has taught us we can be happy doing less and as long as our kids live on opposite sides of the country, I imagine most of our travel budget will be domestic. I am fine with that. Even though I would love to be a world traveler, our travel hearts live in Oregon and New York. Did I mention how thankful I am all I have to do is drive across town to see Son and DIL2?
I agree that appreciation and enjoyment comes with much less than I would have imagined years ago. With one kid on the west coast and another planning to move east, we might be very much like you-our travel or helping them travel to us will be a priority. I still have a few places I want to go, and would like some immersive travel experiences. Of course as my family changes, that priority likely will change as well.
DeleteI think you've got a good handle on what you need and want for your retirement.
ReplyDeleteIn my case, I benefit (quite literally) from a defined benefit pension with an annual COLA. I did retire early - it would have been another hellish 9 years if I wanted the full pension. But I did some serious number crunching, eliminating costs that would not longer be needed - parking and other costs associated with working, contributions to my personal retirement savings plan, and so forth. The first couple of months were a little scary as I adjusted. Later, when the pandemic hit, I discovered it was even easier when I stayed home. Even with major repairs and renovations to the house I'm doing just fine. I do look forward to the day I can downsize and cut my spending even more.
My biggest risk came when, as a single mother, I quit work and went to university. My daughter was 11, my son 5, and it wasn't the easiest four years of my life but I will never regret having done so. I know I wouldn't be where I am now, if I hadn't made that leap of faith.
My pension won't be that great as it will only be for about 1/3 of my working life, but I tried to contribute heavily to my 401 K over the years as well. My additional education made many of my future promotions and current job possible. I wouldn't have met the preferred qualifications of current without going back to school. good for you! That was a tremendous accomplishment.
DeleteMy husband has a generous private pension and retired at 60. In November last year , ages 62, he was diagnosed with terminal
ReplyDeletecancer. We have just had a phone callfrom the private pension provider telling him the “ good news”
that should he die before his statutory retirement age of 66, as his widow I will receive a further £250,000 as a tax fee
lump sum. Once I had taken over the call
I made my views about this “ good news” very clear.
Siobhan
I'm so sorry Siobhan. That was crass of the pension provider and so inappropriate. My thoughts are with you and your husband, family, as you navigate his health needs.
DeleteThank you Sam x
DeleteWhile I knew I could "make it" on a very much reduced retirement income I admit I kept going over and over the figures to be sure I hadn't missed anything before I handed in my notice. You are obviously very much on top of it so I'm sure you'll be fine when the time comes. It's true what they say - you do need less than you think when you retire!
ReplyDeleteI am going over and over, and go back and forth about the right time. Damn cost of health insurance is the chain that I think will bind me longer than I'd like. I might have thought that before I was working from home about needing less in retirement, but now I'm not so sure.
DeleteMy main financial goal is to remain free of debt and to save as much money as we possibly can while we can.
ReplyDeleteMy husband has a Florida and an Illinois retirement and receives social security and still runs a small business.
We've already down-sized and we've done most of the traveling we want to so we do save a lot there.
I have no plans yet on when I will retire.
We too of course are on the saving train, but to our end, is to bridge between my desired retirement and when my pension is fully matured so I don't need to tap into it early. I am envious that you've travelled as much as you want-I have more places and still discover more I want to visit.
DeleteI've never understood the mindset of just needing to keep raking in more and more money, just because. Know a few like that and had assumed when they got older and had "enough" they would relax a bit, but they just keep needing to rake it in. Like I've told dh many times, when you get to that type of lifestyle and need that much coming in to support that same lifestyle, you have to keep at it, constantly. I have no interest in that.
ReplyDeleteI just don't think the lifestyle of excess is one I envy. Sure, hiring people to do things I don't like to do, don't do well would be a great use of money. It makes my life easier and better and contributes to someone else's small business. But then, once I'm not working full time, I might not dislike some of those things and might get better at them-housework, gardening, lawn care as a few examples.
DeleteSounds like you have a good plan, and I like your ideas for what you want to do with your money through retirement. I think your children are fortunate to be able to follow their dreams but to have you as a safety net too.
ReplyDeleteWe are trying to do some home improvements now since we aren't getting any younger. But boy are we tired and sore on Mondays. Hoping that we will be able to do some traveling. I would love to see more of the world. I guess healthcare costs are my biggest concern if we retire early. So we will keep saving while still enjoying the present.
And the fact is, we've not really been much of a safety net for years for our kids-just perhaps their first couple years out of school and even then, not much. I think the confidence of knowing the safety net exists helps build success. You sound like e-travel, ad planning for those darn health care costs.
DeleteWe were forced to retire when my husband was 58. He cannot be left alone all day so I have to be there with him. Our saving for retirement was cut short by 7.5 years. Thankfully we were debt free. The biggest piece of advice I would give is to downsize before you retire because you will likely need to borrow money to do so and having the loan amount based on your retirement income makes it very hard to do with the current high price of real estate. So here we sit in a big house on an acreage and we cannot downsize without moving twice which we cannot do because of my husband's health. Also, as our financial planner pointed out, consider the longevity of your family. All of our grandparents lived well into their 90's and parents into their 80's. Unless we keep putting money away while we can we will run out of money. The amount of money we have now seems to be so much and plenty but in 20 years we may not be able to make ends meet on that amount. Things look very different from the retirement side.
ReplyDeleteThat's a hard situation to have been put in. I'm sorry. I don't really see that we will need to borrow money to downsize, but I'll look into what you suggest. I plan that we will both be well into our 90's when I test scenarios for how long our money will last. We may not be so fortunate but will plan just the same. I really appreciate you sharing your insight and experience.
DeleteI think you have a very good and clear idea of what you want. You'll get there. I appreciate how you want to be there for your kids. I read the occasional post where the writer says the kids are on their own and that's it. As someone who once fell flat on her face having made some disastrous choices, I really cannot imagine where I'd be now if family hadn't stepped in and lifted me up. Probably homeless and aimless. Good for you! Best, Celie.
ReplyDeleteI think I see their point, once kids are adults, they need to have and take responsibility for themselves. Of course that was our philosophy too to a certain point. However, I would be surprised if the blogger was as firm as the post might imply. I've read those too, and later I've seen hints of helping out here and there-that's the safety net I am thinking of.
DeleteGah! I was too incensed on Siobhan's behalf after reading her comment to post my own.
ReplyDeleteOur plan is to sell Stonecroft to one of those equity release companies and use the money to suppliment our lifestyle whilst still living in our house. xxx
I want to stand next to Siobhan and yell expletives into the phone at that person. Interesting plan for your home. I think we call then reverse mortgages in the US, but maybe you are describing something different.
DeleteKitchenaid refrigerator repair
ReplyDeleteI love reading frugal blogs and find a lot of great helping hints but on several I’m so thrown by retired who are still so focused on coming out in the black (in fact still amassing a fair amount of money into the pot every month). Most have set retirement income and savings/investments (that grow!!). Not to say they should be frivolous but I think after a time, spending fruits of their labor, enjoying themselves and in fact even hiring help when needed is too hard. There was a great article years ago, in the financial section of I think the New York Times addressing those who saved so hard that they can’t spend now. Truly a balancing act. Life’s short, I want to make sure at the very least I’m able to enjoy my family and some travel. I will need to downsize in a few years that should help my finances but month to month I’m fine. Thank God for a great pension and SS. I sure do wish I’d amassed more savings myself ha! But it is what it is.
ReplyDeleteYou describe my thoughts very well. While we are working hard to save, we still travel, have a nice home, and want for nothing. Yeah, no insult intended to anyone as some genuinely are happy to live out their retirement the same way they lived before retiring, I don't want to be chasing sales to buy my weekly groceries. If we stay in Minnesota, I want to hire the industrious neighbor kid to shovel or mow our lawn.
DeleteBeing debt-free and in a right-size home for the duration I believe are keys. Do any major home changes while still working. We know we'll need to buy one more roof when we're 75. We'll need to replace heat/ac 2-3 more times. We'll need to replace all appliances at least one more time. We have $100k set aside for all of this. The avg American spends $240k on health after age 65. We have that set aside. I bought my last car in 2016 and wrote a check. (I drive less than 5k a year). Hubster bought a highly reliable vehicle as well but will likely need to replace it one more time. Then we have our monthly living expenses.
ReplyDeleteThose are the keys to know about yourselves/finances. We are 60. I retired at 58 and hubster is working because he really enjoys his current role so our health insurance is cheap under his employer plan. Should he opt to retire, we can handle the cost of that as well.
Knowing all of this, you can derive your plan and your timeline for retirement.