Yes, we all know we think about it. What do we need to retire someday? Well… financial advisers tell us we need to have $1,000,000.00 in the bank to support ourselves through our retirement years. Seriously??? This just isn’t going to happen here in the real world. I’m no financial adviser, but I’m just a person who hopes to be able to take it easy someday… So here are just a few thoughts I have on making it happen for myself someday!
SIMPLIFY! Right now, I live in a 4 bedroom 2 bath home on a little less than one acre. With any luck, I will have enough equity in this home when I retire (lets just say in 15 years for all intensive purposes), that I can sell it, and buy a house outright with cash. Let’s imagine a home equity as it stands today is right around $110,000.00 (which doesn’t buy much… but it will get you a roof over your head…) So in 15 years, imagine the equity that will build towards a mortgage free home. So, when you ask yourself, “should I include the equity of my home in my total net worth?”, my personal opinion is YES! Not having a house payment in retirement years will be a big plus. Just don’t forget that there will always be taxes and insurance, along with possible HOA (Home Owners Association) fees to pay!
LIVE IN A WALKABLE COMMUNITY! Right now I have a car payment… I’ve had one all of my adult years, with the exception of the 1975 Ford Granada I bought for $1,000.00 when I was 20 years old. Having a reliable newer vehicle is a must for me at this time in my life when I drive 15 miles to work each way. Gas prices, auto insurance, and car payments really add up. Luckily, my job affords me the be able to pay for this. I have never really lived in a walkable community, but the whole idea sounds fantastic to me in my later years! Of course, I will always have a car, but at some point, I hope that I don’t need a 4 wheel drive, snow busting SUV. The older I get, the better it sounds to be able to live close to a community where I could walk or bike or (yes…) GOLF CART to places I need to go. It’s a quiet dream I have to be “That lady” with the basket on her bicycle riding down the road to collect sea shells on the seashore. Those “Over 55” Active Community’s don’t seem so bad after all!
HEALTH INSURANCE COSTS… Wow… these go up every year, along with health care costs. This is huge when making the decision of what age to retire at. At 62, Medicare isn’t at option. So working full time may just be the best decision. Eligibility for Medicare begins at age 65. Just don’t forget about supplemental insurance for major health care costs if something catastrophic hits, like cancer, heart disease, among a million other conditions that may create a medical financial disaster if you aren’t properly insured.
SOCIAL SECURITY… Right now, it does still exist. We’ve all been contributing to this fund every day of our working lives. Our parents are drawing on what they’ve contributed in their retirement. So what we do today is cross our fingers, and hope that it still exists to supplement our retirement savings in the future. Right now at age 62 we can collect Social Security at a lower rate. Full retirement actually is set at age 67. Can we exist on Social Security alone in retirement? Do you enjoy poverty? The answer to both questions is a big NO! Unless you really do enjoy poverty… So…
RETIREMENT SAVINGS! Yes, it’s soooooooo very important; SEP, 401K, IRA, Roth IRA, etc… the list goes on and on. Make a point to put away as much as you can each paycheck! Each person is different. So I don’t feel like it’s a good thing to define exactly what a person should have in the bank at the time of retirement. But, it’s so very important to have that financial adviser who can help you set up just the right plan. Be upfront and forthright with the lifestyle you wish to live after you retire.
KEEP WORKING… If you don’t like slowing down, by all means, keep working! No one says you have to stop, especially if you really love what you do. If you retire, and decide you can’t stand it, you can always go back and find a new job (even if its just a part time gig!)
So that’s all I have for today’s blog! Feel free to share your thoughts and ideas as well.