What the Retirement Experts Should Have Said About Retirement Planning

Category: Retirement Planning

July 31, 2017 — Just like the childless doctor that gives parenting advice, almost every “expert” has a few things to learn once they actually experience what they have been advising on. Retirement experts are no different. We recently read a great article by Paul Brown, who co-authored several books about retirement in his 30’s and 40’s. Now that he has actually experienced retirement for a while, he has had some realizations. In general Paul believes he gave good advice to his readers. But he knows now he should done two things differently:
1. Been more empathetic. Actual life is more complicated than theoretical.
2. Given more concrete examples.

Later on in this article we will give a quick rundown of the 3 examples he wrote about in this NY Times article, “Things I Should Have Said About Retirement Planning“. But first, here are observations from your editor.

What your editor has learned:
It takes a lot of money to maintain your pre-retirement lifestyle if you had a high paying job (and even if it wasn’t so high paying). You tend to ignore that once the paychecks stop, they really don’t come in any more. If you retire at 58, like we did, you’ve got a long time before Social Security kicks in (and by itself, it is not a replacement for a good income). It also takes a a big pile of retirement savings to equal the income from a good paying job. Lets just say your household income was $100,000. Generating that much annual income using the commonly used 4% withdrawal rule translates to having retirement assets of $2.5 million. Need $50,000 – you’ll need half that – $1.25 million. Sadly, the Employee Benefit Research Institute says that 45% of people 55 or older have less than $100,000 in retirement savings (that generates a paltry $4,000 annually at 4%).

You have to take charge of your own retirement. You don’t have a boss anymore to tell you what to do. And if you were self-employed, your goals are now completely different – they are personal, not business. If you don’t take charge you will be rudderless, floating along with the currents of daily stuff. And that means squandering a unique opportunity to completely reset your life.

Exercise and stretching are important. We knew before retirement that our body is a machine that needs regular exercise to stay healthy. When your editor retired he plunged into even more sports and exercise. But every year he suffered an injury that took months to recover from. Unfortunately he ignored the advice that daily stretching, pilates, or yoga – something to keep from getting too tight – was critical. Finally thanks to our trainer friend Leigh’s prodding, we do lots of stretching, and, knock on wood, we are injury-free. Too many of our friends don’t exercise or stretch regularly. You can see it when they struggle to bend over or get out of a chair, or can’t play because they are injured.

Paul Brown’s 3 examples:
1. People resist the idea of working longer to save for retirement, but are shocked by the fact they don’t have enough savings.
They probably haven’t saved enough by the time they thought they would retire, usually 65 or so. His advice – work until age 70. That strategy has multiple advantages – you get more time to save. And you increase your Social Security benefit by 8% a year by waiting longer. In the example he gives for a couple making $120,000 per year, they would increase what they have to live on by 47% if they worked 5 years longer and delayed taking their SS. He still thinks this is good advice, but now he realizes that as you get older working is harder. Sometimes your health or energy levels might not be up to working full-time up to age 70. And sometimes you lose your job and can’t get another one.

2. Life doesn’t move in a straight line. Brown assumed that once the kids were out of the house that people’s expenses would go down and their savings increase. But that tends to ignore major expenses that might have been postponed, expensive weddings, help for aging relatives, etc.

3. The things you want to do in retirement will stress your budget. You might take expensive trips, fund a big family outing, make improvements to your home. All that is going to cost more than you probably budgeted for. His advice: “…no matter how much money you are going to need, save another 15% just in case.”

Comments? Now that you are retired, what advice would you give someone who is trying to get ready for that hopefully happy event. Please share your ideas in the Comments section below.




Posted by Admin on July 30th, 2017

63 Comments »

  1. I lived in California with my husband for $2000 monthly and still enjoyed ourselves . We don’t need a lot of traveling since we got that out of our blood earlier in life. Don’t have any children and not much of debt so it makes it easier to live on a limited budget…will be having an inheritance of $$200000 so hopefully will be able to make that last for at least 25 yrs in the Pacific Northwest! !

    by mary11 — July 31, 2017

  2. When I first joined my company’s 401k I was very excited to do so. I had read a lot about 401k and knew that it was a great way to save. I started off with the amount of money needed so my company would match 50% up to the first 6%. Then each year I received a raise I would put that percentage into the 401k. My company changed its match down the road and it was more than 50% on the first 6%. I was up to 22% by the time I found out my job was going to end. I had about 5 months before my group was let go and I increased my 401k to 25% for the last 5 months. I regret not saving more. I could have put my nose to the grindstone more but still did very well. It is pretty painless to put the raise into the 401k and pretend you never got it! I got a late start in that 401k. I started as a temp and worked 9 months until they hired me full time. Then I had to wait a year to join the 401k. Later on for new employees they changed the rules and they could join the 401k immediately. I had about 17 years to save. Then I worked at another company that had a 401k but didn’t match a penny! I still socked away 22% for 4 years. I also opened IRA’s prior to having 401k’s. The bottom line is save, save, save! Save till it hurts! My Hub used to crab his paycheck was so small because I had him save a lot too! Now when he gets his retirement savings statements, he is very happy and pleased.

    by louise — July 31, 2017

  3. If I have learned nothing else from reading this blog it is that retirement has become BIG BUSINESS with people from all walks of life lining up to get their hands on a piece of your hard-earned pie. My advice is to save and grow your nest egg for as long as possible. My husband and I have decided that that time will be towards the end. Without funds, conditions for the sick and elderly are something you don’t even want to imagine.

    by Alice — July 31, 2017

  4. Life doesn’t always go according to plan, if ever. Sometimes, retirement comes to you and not on your schedule. I’ve been retired for a couple of years now (at age 66), but my younger wife planned to work for at least 4 or 5 years after I retired. However, her company restructured after a merger and needed to downsize. They offerred her an early retirement package that she either accepted or took her chances in the reduction-in-force. She accepted the offer and retired this May. She had only 2 weeks to decide on the offer so our financial plans had to quickly be revised after her pay checks stopped and we waited for her much smaller retirement annuity to start.

    As we a pproached retirement, we knew that we needed to do a lot of updating on our large home so that we could get it in shape to market. We no longer needed a 5 bedroom house and wanted to downsize and move to a less expensive area. We were slowly doing some remodeling and taking care of the maintenance items that had been deferred over our working years. As Mr. Brown states, these are big expenses and probably best taken care of while you have employment income coming in and not after retirement. Now, because of my wife’s unplanned retirement, we are stuck with this big house that needs repairs and updating in order for it to be sold. Bottom line, if you plan on moving after retirement, keep your house in good shape as you near retirement so that if the unexpected happens, you can quickly sell it without having to dip into retirement funds to make it marketable.

    by LS — July 31, 2017

  5. LS, don’t laugh but we sold an inherited house in need of updates and repairs to “We Buy Ugly Houses.” It was a quick sale and we didn’t have to put any money into it. Just a suggestion but easy enough to look into if it could be an option for you.

    by Alice — July 31, 2017

  6. LJ, Alice is right. I sold my Mom’s home which needed some tender loving care. Nothing was in immediate need of repair but the next owner would need to invest money in time. I sold it ‘as is’. I really needed to sell the house ASAP because no one was living in it and the insurance company wouldn’t insure an uninhabited home. I had to go thru a junk insurance company that charged an arm and a leg for insurance. I have heard thru the son of the woman who bought the house that she put on a new roof, put in a half bathroom downstairs, remodeled the kitchen/upstairs bathroom, put in new carpeting and painted the inside. Oh, and the other thing the realtor advised us to do was to buy a home warranty. It was for one year after the purchase of the house. It would replace/repair things that might go wrong. Like plumbing, oven, refrigerator, boiler issues and other stuff. She said it would give the buyer confidence to buy the house even though it needed repairs. The warranty wasn’t that expensive either. I am going to say $350 for the year. Hahaha, I was so desperate to sell the house I even bought a St. Joseph statue and followed the instructions to bury it. Funny, shortly after we did that we sold the house! We dug St. Joseph up and he is in our house now waiting for the next burial!

    by louise — July 31, 2017

  7. Correction to TR’s quote from the original article: The author said he would be more empathetic, not more emphatic. The case for either or both could be argued though.

    To paraphrase poet Robert Burns’ words from over 200 years ago, the best laid schemes of mice and men often go awry. Retiring at 70 presumes a lot of things going exactly right and virtually nothing going wrong. I know a tiny handful of people who’ve remained full time in their regular jobs until age 70. Or discovered that they wanted to. Most of us bail sometime in our early to mid sixties with varying levels of resources to sustain us.

    My advice mostly echoes comments made above – take charge of your own money, save as much as possible, scale down your lifestyle before retirement so that reduced income isn’t a terrible shock, find inexpensive hobbies and time fillers, and be kind to your spouse if you’re lucky enough to have one because you’ll be spending a lot of time together.

    I recommend conservatively figuring what you can draw from your retirement funds. The math is fairly simple. (If you’re 65 you’re not likely to live more than 33 more years. Divide your nest egg by 33 and divide that quotient by 12. There’s your monthly draw. Don’t figure in any growth. Let that be a cushion against unexpected expenses.) Add in SS and a pension if you’ve got one. That’s what you have to live on.

    If you won’t have enough money the time to be creative is sooner, not later. Don’t hope that things will magically improve. They won’t. Proactively do what needs doing. Get a roommate, downsize, see about a part-time job even if it’s only seasonal to start with. Use YouTube and blogs to learn simple household fixes and how to cook inexpensively using ingredients like flour, dried (not canned) beans, fresh in-season produce, etc. When something needs replacing, check out thrift stores and Craigslist.

    If you don’t have heaps of money, take heart. I have a couple of friends who are multi-millionaires, a few friends who are barely scraping by, and lots who are in between. Unless money is in such short supply that the situation is dire, it seems to barely affect people’s happiness index, retirees included.

    There are plenty of miserable people sailing the world in cruise ship suites and plenty of happy ones pushing little children on swings in the park. Joy is rarely based on circumstances. We bring it along to whatever situations we face.

    Comment from Admin: Thanks for the correction about empathetic – fits better (now corrected)! Many more thanks for the wise advice in your Comments – words to retire by.

    by JCarol — July 31, 2017

  8. Like Louise I started with my 401K early on and had a company match on the first 6% saved. I had conversations with other associates that said they needed their money know and could not convince them that the company was giving them a raise to save tax free money. Well it work out for us. I retired when I was 60 years old and that gave me time to get the house ready to sell. We had a 5 bedroom 3 bath and it sold in April of this year and only on the market for 3 days. We are know in an apartment which is a big change but satisfactory. Wife will retire end of this year and we are heading to Arizona. We have checked out many locations over the last several years North and South Carolina, northern Florida, Georgia. We did live in Knoxville, Tn. for 15 years and loved the area.
    Downsizing was a big job as the museum as I called it needed to be thinned. What the children didn’t take we donated to charity. So we have very little in storage. We decided was it worth moving something across the country
    or wait to we arrive and buy new. Moving, storage are very expensive and you should consider if that picture or old chair that needs repair is worth it.
    I would also suggest looking at long term care as early as possible. The rates are based on age.
    Make your monthly budget and change it as your lifestyle changes. It does come in handy as you make financial decisions with a limited income.

    by Bruce S — August 1, 2017

  9. Bruce S, I bought long term policies for my husband and myself years ago thru the company I used to work for. I still pay premiums. The maximum cost it will pay is $6,000 a month and It may cover up to 3 years max. I would have to look at the policy again. In my Town in CT one nursing home was $12,000 a month back in 2013. My Aunt is in a nursing home in TN and it costs $6,000 a month. So I am assuming if one of us went into a nursing home in CT we would have to pay the $6,000 difference per month.

    I also knew people who resisted getting into the 401k where I worked. Fortunately, we had a very kind boss who sat some of the employees down and told them the benefits for their future. He convinced several of my coworkers and I know they appreciated it when their quarterly statements arrived. Sometimes we need guardian angels to make us understand. I on the other hand had to wait and the day I was eligible, I was in the personnel office to get my paperwork to sign up! Seems I waited a life time to join!

    Just to let you all know, my friend works at WM and they have a 401k there. If some of you wanted to take a retirement job and didn’t need the income, you could probably invest your entire paycheck into the 401k and rack up some savings! Most WM workers don’t make much money so investing in 401k is not all that lucrative for them but if you already have SS and other money coming in, it could be a way to save and get out of the house! Plus health insurance. But the trick is to get a full time job there.

    by louise — August 1, 2017

  10. Mary11, you have expressed your interest in moving to Oregon. Well, this might be the best state to move to after reading this article! Awesome!

    http://www.huffingtonpost.com/entry/oregon-kate-brown-health-care_us_5980b072e4b08e1430061419?ncid=inblnkushpmg00000009

    by louise — August 1, 2017

  11. A good long term care policy can be an excellent investment and a good policy can also be difficult to find today — and expensive. We found a good one through Genworth which provides for either in-home OR nursing home care when we turned 55. It includes an annual 5% increment in daily benefit (with no change in premium). Now that we have paid in for more than 10 years, if one of us should die, the other continues to be covered with no further additional payment for life. If we must draw on the benefit, our premium payment stops for the duration of the care requirement. My coverage is for 4 years cumulative, my wife is covered for her lifetime. Our premium was raised one time (after 10 years) by approximately 10%. Our cost is approximately $3000 annually, so we have yet to pay out for the cost of even one year of care.

    I provide this information to show that a good policy can be found and what may be provided — though today the cost may be significantly more expensive (especially if you are older than 55). I doubt that you can find any long term care that will guarantee NO increase in premium over time. Keep in mind that long term care is INSURANCE. Once paid it is gone. If you default, it is gone. But if you have significant retirement assets (savings/home), it can cover or help cover the cost of any extended (90 days or more) care without draining those assets. Do be cautious in selecting a long term care company/policy — in recent years, many long term care policies and coverage have not survived (Also keep in mind that Medicaid covers only those with low income, it has significant limitations and may it not survive the current health care chaos — in some states, that is already true.).

    by Rich — August 2, 2017

  12. Rich, thank you for presenting information on LTC insurance. Ten years ago DH and I investigated and declined to buy LTC insurance. We’re hoping to not rue the day we made that decision. Our annual insurance costs were already through the roof: I looked up our budget spreadsheet from that era:
    Health insurance was $18,000 via private policy for mediocre coverage. Had no health issues or preexisting conditions.
    Auto was $2500 per year (we had 3 kids in college and helped pay some of their insurance)
    Homeowners (including earthquake) $3500
    Life insurance $1500
    Total insurance costs ten years ago: $25,500. Other than health insurance we haven’t filed claims of any kind in the ensuing decade and almost never in the prior decade.

    When we investigated this, our understanding of LTC insurance was that the premiums could go up at any time, and by virtually any amount, as long as our entire classification (geography, age, who knows?) was bumped. We simply couldn’t justify more money going to an insurance company.

    Good work in finding a policy that appears sound and not outrageously expensive. For your sake I hope you never need to use it. 🙂

    by JCarol — August 2, 2017

  13. JCarol — we faced a similar problem, but with a strong policy from an insurer of outstanding reputation, we did choose differently. One reason was that we also got a quote at that time for my mother (then 79) — it was incredibly high! Far more than she or we could afford. But we took it as a warning. My Mom has passed on now and, though she did need care for a couple of years, it did not qualify for full LTC until the final month. Personally, I agree with you — that is how I would hope we could all pass on — fast and with minimal anguish.

    Long term care insurance is only an option for those with enough resources that they feel are worth protecting (you would move to poverty if you lost it), but not enough that they can absolutely set aside $300k to 400K in the event they must pay for long term care out of pocket.

    by Rich — August 2, 2017

  14. Planning for retirement requires many assumptions. How long will I live, how healthy will I be, what will my expenses be, what rate of return can I expect on any savings, what will inflation be, what unexpected costs will arise and many other personal and financial considerations. If possible, it is always good to evaluate worst and best case scenarios to the degree you can do that. At any rate, adding some cushion to your expense estimates is wise. All of this really requires some kind of risk taking. Each person or couple needs to decide the level of risk they are comfortable assuming.
    One big thing to realize is that planning is, or should be, an ongoing exercise even after retirement. At least annually retirees should evaluate where they are and if they need to adjust anything. In my opinion, there will always be some short term (1 to 5 years) and long term evaluation needed. And this should be happening a long time before you retire also.
    I agree with JCarol. Hopefully folks will apply a bit of balance to their planning and activity so that they do have the opportunity to enjoy life before and after retirement. It is good to have a certain level of financial security but it doesn’t guarantee many things and certainly not happiness. The best to all!

    by Mejask — August 2, 2017

  15. Louise, thanks for the info….it sounds good. Maybe other states will do the same. California should be next.

    by mary11 — August 2, 2017

  16. Mary11 and Louise reference an article that causes me to ponder a larger question. Please note that it’s not my intention to fan any political fires, so please accept this comment in the spirit in which it’s offered.

    After reading the article I wondered how further polarized the US may become. What happens when states take up the practice of passing laws to reinforce their agreement with current federal laws? Especially when it’s done in hopes of protecting those states from future federal law changes. Or states creating new laws with the intention of thwarting current or likely future federal legislation?

    There already are certain areas of our country that I view as “nice places for a very short visit but I wouldn’t want to live there” because of their political climates. Likewise, there are lots of people who feel that way about where I live.

    Will we, based on today’s political leanings of a given area, inadvertently create states that are permanently red and blue? This, rather than states where a majority of citizens lean in one political direction or another at a particular moment?

    Will conservatives eventually abhor the very thought of moving to OR or CA? Will liberals scream bloody murder if their employers relocate to Idaho? I fear a loss of local rich diversity and political balance if we further set the stage for people to self-segregate by political leanings.

    It’s food for thought.

    by JCarol — August 3, 2017

  17. These are the items I’d suggest prospective retirees consider & act on:
    1. Simplify
    2. Plan for the transition from ‘accumulation’ to ‘income’
    3. Downsize & purge
    4. Have a solid plan for healthcare
    5. Have a solid plan for long term care.
    6. Don’t forget the non-financial aspects of retirement like personal relationships.

    by Mark — August 3, 2017

  18. Regarding long term care insurance, you should not assume that it protects assets like a home, etc. without talking to an elder care attorney as part of your financial planning. For ex., when my spouse was diagnosed with a degenerative disease in his early 50s that would eventually be terminal, we consulted an attorney and learned about Medicaid eligibility. In our state, our home was fully protected, as was one car (attorney recommended buying a new car as part of the spend-down of assets). I was able to retain $100K of marital assets, my own 401K, and any term life insurance that we had put in place. My spouse eventually was admitted to a nursing home, and resided there for several years before death. We spent down remaining assets on this care, and then he received Medicaid. His SS went to the nursing home (disability SS converted to his regular SS benefit automatically at age 66). There were several people on his ward who were paying for care (in part) with long term care insurance. I can tell you that they received exactly the same care, room, etc. that my spouse did (my spouse had a private room and some of them did not). The families did talk about the aggravation of dealing with their insurance carrier, so I’d suggest doing research into claims handling before buying a policy if long term care insurance is part of your planning.

    Since Medicaid requirements can vary by state, it’s vital to consult with an attorney as part of your own long-term-care planning. In our case, my spouse was older than I was, and would die from his disease. We determined that I’d be adequately protected for the rest of my life from the equity in our home, SS and my own 401K (I used the $100K allowance for marital assets to save our kids’ college 529 accounts – maybe it was dumb, but getting our kids through college was a priority for us). If my spouse had been able to buy term insurance, the premiums would have certainly been less than the cost of long term care insurance – and that insurance could have replenished the other assets spent for his care.

    I’m sharing this personal story in case it helps someone else. Again – get an hour of time to pick the brain of an elder lawyer in the state(s) where you may retire. It could be well worth the small fee.

    by Kate — August 4, 2017

  19. Kate, what state do you live in?

    Thank you for your input, very thorough and food for thought!

    by louise — August 4, 2017

  20. The only comment I would add to this article is to downsize every aspect of your life from eating out to utilities to buying what you really don’t need. Get your health in check now. The sooner you do the better prepared for retirement you will be in the long run.

    by William DeyErmand — August 4, 2017

  21. Had to hurry to catch a plane but, thought I’d expand on the first post.

    1. Simplify: fewer investments (low cost index funds) set up to be as much ‘hands off’ as possible; typically retirees want to spend less time managing their investments as they age, and complexities are normally not worth the trouble.
    2. Plan for the transition from ‘accumulation’ to ‘income’: verify your AA fits your “retiree” risk tolerance, know your essential & discretionary expenses, and have a detailed plan for where you will fulfill each of those expenses needs (i.e.: where’s the $$$ coming from each year?).
    3. Downsize & purge: you need less stuff & less house than you think you do…really! Purge your stuff well in advance (1-2yrs) of retirement, and be ruthlessly practical about how much space you really need to live in. [Note: Our personal example is that my wife & I live in less than half the space we did before retiring. It’s one of the ways we were able to live in the much more expensive location we desired.]
    4. Have a solid plan for healthcare: I know the whole healthcare landscape is in turmoil but, don’t let this put you off of having a solid plan. You should know specifically where you will get healthcare, and that you can afford the cost, from the first to the last day of your retirement. If you’re fortunate enough to have employer provided retiree healthcare, then plan on that & Medicare to fulfill your needs. If you need to rely on ACA exchanges or, perhaps COBRA followed by ACA exchanges, then plan on that and have an emergency fund for any dramatic increases in premiums and/or deductibles. Don’t let today’s healthcare landscape turmoil be an excuse to no plan.
    5. Have a solid plan for long term care: Do not ignore this. And, be realistic (i.e.: my kids will take care of me is not a realistic plan.). Investigate LTHC insurance & CCRCs; these are two methods to provide for this need. Self-funding, for the very wealthy, is also an option.
    6. Don’t forget the non-financial aspects: Be sure that your personal relationships (friends & family) are addressed by your plan. This will typically affect location.

    Happy Retirement!

    by Mark — August 4, 2017

  22. FYI. …just for general information, CA is not completely liberal. For example San Diego is conservative. …

    by mary11 — August 4, 2017

  23. Louise – my experience with Medicaid was in PA within the last 4 years. Anyone considering retirement there should verify that nothing has changed. I am currently in the Carolinas, and am trying to decide where to retire. I will be making an appointment with an elder lawyer for the scoop on the finalist state and potentially updating my Will, living will and health care power of attorney under applicable state law as soon as I figure it out — following my own advice. By the way, I am originally from CT. Go Huskies :-).

    by Kate — August 4, 2017

  24. Kate, I thought you were from CT from some previous posting you made. I am from CT too.

    Thanks for letting us know your experience for Medicaid was in PA.

    You are brave to move by yourself to another state to retire. My hub and I keep talking about moving and other than look at things on the internet, we have done nothing. However, my hub has developed some health issues and is undergoing treatment. So that is tying us down. He is comfortable with his doctors and hospital so no sense upsetting the apple cart at this point. Health issues are definitely not what we expected in early retirement. It is scary to say the least. I lost my Mom 3 years ago and have not been able to get over it…only child syndrome…

    Sometimes I wonder if locating to another state is the right move. For the time being we can afford to live in CT. Crime in my town is low and it is a nice town to live in. But things in CT are changing. We currently have no State budget in place. CT is in financial trouble and the answer to everything is raise taxes. Large companies/corporations are leaving the state in droves and people are selling their houses and leaving in droves too. So, I expect taxes will increase tremendously due to less corporations and as the population decreases. When they tax us to death we will have to bite the bullet and move. It is so hard to leave what you know to an unknown town and wonder if you will like it or hate it. Kind of like when the Pilgrims left Europe to the New World! They were incredibly brave! Not like they could go to the grocery store to get food in those days!

    by louise — August 4, 2017

  25. Kate’s advice to consult an elder care attorney is sound. However, her experience with Medicaid may not be the right path for you. For example, my father-in-law has been in an assisted living facility for 7 years. He needs daily care but is not yet sick or disabled enough to be in a skilled nursing facility. Medicaid does not pay for assisted living facilities but long-term care insurance does. LTC will also pay for in-home nursing care if that is the level of care you need and Medicaid will not. Fortunately, my FIL has the resources to pay for his care in assisted living but if he did not, a LTC policy would have been a good option for his circumstances. Both my wife and I have LTC policies.

    by LS — August 5, 2017

  26. Lots of good advice here. When my husband, who had a high stress job he loved, came to me and said he wanted to retire he was in his late 50s while I was on my late 40s. I said fine, but I’m retiring, too, so figure it out. He came up with a five year plan that has worked very well for us.
    1. Downsize everything. We had a BMW that was sold and replaced by a less expensive car that we bought at 0% interest. Our other cars were paid for so we hung on to them.
    2.We moved to a brand new home in a better community that had a much better rate of growth for future sale. Very little difference in payment.
    3. We stopped traveling by airplane to expensive locations and made our RV our primary travel mode.
    4. We doubled and tripled down on our RV payments so it would be paid off by retirement as it was to be our new home.
    5. We socked every available dime into 401k and my retirement account.
    6. We seldom ate out and limited ourselves to inexpensive restaurants when we did. Ok, we did splurge a bit on birthdays and anniversaries.
    7. We told everyone we knew what our goals were. My husband’s very wise philosophy is that if people know your goals they will help you achieve them. They did and by the time the day came to hit the road we had sold or given away, mostly to friends and acquaintances, all our worldly goods that didn’t fit in the RV. One yard sale and a small trip to Salvation Army later we were free.
    We’ve never looked back with regret but only with wonder at how lovely the last 12 years of freedom has been. We now have a home base in a little gated RV community that is only 800 square feet of living space in a park model home and we would never dream of upsizing again.
    Think ‘live small’ and life gets immediately easier.

    by Laura C — August 5, 2017

  27. Laura C, you bring up a very good point about paying off car notes, mortgages and other bills before retiring. Same with credit card balances.

    by JCarol — August 5, 2017

  28. Louise,
    I know how it can be a little scary to move to a new location but it can be exciting ….I have lived now in NY, FL, CA and OR. If you don’t need to be close to family its fun experiencing new places and meeting new people. Its not for everyone I know but I have been traveling internationally since the age of 1. We will be moving to the Pacific NW because its much better on your budget than CA. I also want to downsize and be able to travel a bit in retirement….

    by mary11 — August 5, 2017

  29. When purchasing a LTC make sure it covers in home care, as well as Nursing home care. The average yearly cost for in home care is $46,342 and the average Nursing home care cost is $82,128. Depending on your location, and the amount of care you need will change these numbers. The benefit per person with a LTC is $4,000 a month coverage. The premiums are high and are not available until 10 or 20 years. Make your needs clear as possible before purchasing a policy, as no one can foresee the future.

    by William DeyErmand — August 6, 2017

  30. Laura C, I am assuming you live in a place with one season, like Arizona. It is difficult to deal with certain things in the Northeast and to live in a tiny home. With winter coats, sweaters, boots, extra blankets, shovels, ice melt salt, snow blower, etc. All these things take up room.

    You have presented a lot of good advice. I especially agree with number 5. I did the same when I worked but I could have saved more. Save till it hurts! I always put my raises into my 401K. If I got a 3% raise, that 3% went directly to 401k! When the next year came around, I did the same thing!

    I would also make another suggestion for the 5 year plan, and that would be to take on a part time job and figure out the percentage you are bringing home and put that amount into your 401K from your full time paycheck.

    by louise — August 6, 2017

  31. Mary11, I have travelled extensively all over the USA, one time to Switzerland and about 24 times to the Caribbean. A lot of travel was business related and the other travel was for vacations. However, when the travel was done, I always had ‘home’ to return to. I have never really desired to move anywhere in particular. I have no family left so that isn’t an issue either. You are right, it is fun to experience new places! When my Hub and I were young, it was nothing for us to get in the car and just go away at the drop of a hat. Now, we are older and stuck in a rut!

    by louise — August 6, 2017

  32. Laura C–where is your park model gated community? This is the wave of the future I think and more of them are available, but not all over the country.

    Thanks,
    Jennifer

    by Jennifer — August 6, 2017

  33. We’re beginning our journey towards retirement (@ 70) in five years now. Purging has already begun w/a pre-move garage sale next week. We’ll go from 4,000 sq. ft in IL to 2,000 sq. ft. in WI (leaving the tax piranha’s in IL) soon. Keeping my four year old SUV (“only” 60k miles) for at least three more years. Meeting with a professional retirement/wealth management firm on the 22nd.

    If we’re frugal (smart, careful and focus on value) we’ll live a comfortable life style until the end.

    We hound our 30 year old daughters to keep putting 15% in their 401k (+ employer matches) and they too won’t be worried about their “leisure” years.

    Bob

    by Bob R — August 7, 2017

  34. Love your plan, Bob. Also your advice to your children. We do the same with ours.

    p.s. I drive a 16 yr, old SUV that’s still in great condition. “Only” 145K miles. 🙂

    by JCarol — August 8, 2017

  35. New article from the Washington Post, ‘The New Reality of Old Age in America’
    https://www.washingtonpost.com/graphics/2017/national/seniors-financial-insecurity/?hpid=hp_hp-top-table-main_rigged-pensions-1213pm%3Ahomepage%2Fstory&utm_term=.7d836c2578c8

    by Kay — September 29, 2017

  36. Kay I would love to have read the article but the Washington Post link you supplied wants me to subscribe before they will allow access to the article, perhaps you could summarize it for us? Thanks.

    by Jennifer — September 30, 2017

  37. Jennifer….the article was about how Social Security has lost a third of its buying power and because of that many retirees who have little or no savings have to work. They showed a few couples who had to live out of a trailer and worked at campsites to make extra money. They would travel to different states for jobs . They don’t trust the govt to provide for them and worried that medicaid will no longer be available for them. It’s sad to hear these stories. It never used to be this way. My father retired through GM in the 80s and he received a pension and full medical and dental benefits for life. That’s unheard of today!!

    by mary11 — September 30, 2017

  38. mary11….they need to bring back those commercials showing old people pushing mops and brooms. Social Security is the major income stream because people have been unable to save and in the old days the defined benefit plans supplied by companies did the investing. Many people just are not good at investments or when the stock market dives as it did in 2008, they lose money. My father has a pension from such a company and my brother has two pensions, my cousin works for UPS and will have a pension. My Aunt has a dream golden parachute pension from Eli Lilly & Co since 1993. They even pay for her co-pays and secondary insurance in retirement. I am not so fortunate, so I will have to rely on SS and whatever I have in my savings and 401K,IRA, etc. I hope to work part time in retirement. Single people and women have it rough in retirement.

    by Jennifer — September 30, 2017

  39. Thx Kay for sharing that article. It backs up what I have seen with traveling with my job. I talk with retiree’s a lot to get real facts. When the company I work for did away with our pensions and my wife was laid off due to age, it was a reality check. It is a crisis the future of retiree’s and nobody is talking about it.

    by William DeyErmand — October 1, 2017

  40. That is a sobering article. I wonder if some of those folks regret their vote.

    by Debra — October 1, 2017

  41. There are a lot of reasons people don’t have enough money in retirement. Not all are because of low wages. Some people won’t participate in 401k programs. Some people live beyond their means. Some have to buy the latest gadgets. Some people lose their jobs then use their retirement funds to get by. One financial misstep a friend of ours made was to send their son and daughter to a prestigious preparatory school for 9-12 graders. They mortgaged their house to the moon doing so and then sent them off to college. These people were not rich and were just average joes. The school system in our town is very good and not sure why the wife insisted her kids go to that private school. The husband said he would never live long enough to pay off the house. For years after he retired, he has worked at menial jobs just to make ends meet. He said he shouldn’t have retired because he made twice as much at his regular job than he did at his part time jobs. Now I have heard he is sick and last year had a mini stroke. I also don’t think those kids got spectacular jobs either. Maybe a tutor for each kid would have been a cheaper option. Current costs per year per kid is $44,000 at the private school!

    by louise — October 2, 2017

  42. Louise, hopefully the well educated children of your friend will help support them in their old age. Many people here in Washington, DC go the same route. Within five blocks of my home is a pre K school that costs $50,000 per year! Amazing….but they feel they serve the best and brightest….I am at a loss for words.

    by Jennifer — October 3, 2017

  43. Louise, you are absolutley correct. Everyone of our friends who are now having serious financial problems lived way over their means for as long as we’ve known them, in some cases that’s over 40 years! And it’s not just the serious lack of money they are dealing with but the serious psychological impact of having to adjust (or not) to living an upper middle class lifestyle to barely getting by.

    by Jean — October 3, 2017

  44. True, most people with inadequate retirement savings were careless about their spending and never gave enough thought to the future. But many other folks suffered from bad luck, or bad luck combined with less than optimum planning. Maybe you had limited skills and never made much more than the minimum wage. Or if you got laid off in your early 50s and couldn’t find another equivalent job, or if you had to stop working to take care of a loved one, or if you had a debilitating injury or illness, you could be in a big pickle and not one of your own creation. I think the point here is to try to find ways to make challenging retirements better, not play the blame game.

    by Ken — October 3, 2017

  45. There is a factory in my town that has always paid extremely well. The production people make lots of money and get overtime. Many are married to other production workers. Their combined incomes are incredible. I know some of these people bought mansions and expensive vehicles like BMW’s and Cadillac Escalades. About a decade ago they shut down a production line with the snap of a finger and there were husbands and wives that lost their jobs in a blink of an eye. These people were not skilled workers like electricians, carpenters, HVAC, plumbers, etc. They still had giant mortgages, car payments and bills to pay off. That had to be a horrible time for those people to try to live off of unemployment. No one expected the golden goose to stop laying golden eggs. It makes me wonder if these people could ever find similar jobs. Factory jobs that pay well are not easy to find anymore.

    by louise — October 3, 2017

  46. Louise don’t laugh every time I sold a property I buried St. Joseph and it worked. I did it for a condo I own and got a sale and changed my mind however all the other 3 neighbors in my quad sold theirs quickly. Now I am going to sell my house in Florida and have St. Joseph waiting.

    by Ginger — October 5, 2017

  47. It’s not just factory workers. I worked in the mortgage industry but lost my job in 2007, just shy of 60 and a son starting college. I lived in Florida and there were no jobs. I was able to create a small home business but made a fraction of what I earned as a mortgage loan processor. I did not find full-time employment for 5 years and still earn 40% less than my highest income.

    I am one of tens of thousands of people whose lives were turned upside down. At my mortgage company alone, 3,500 people lost their jobs with less than a week’s warning. You can’t plan for that. I am luckier than many. I lived on unemployment, retirement savings, home equity loan, and Social Security widow’s benefits .I was able to stay out of bankruptcy and stay in my house until the market went up enough that I sold it for a $1,500 “profit” in 2013, the highest sales price for my model home since the housing crash.

    I am debt-free but no longer own a home. I am rebuilding my savings – at a much slower rate. I will have to work at least until I’m 70 and when I retire, I will have to live on Social Security income. Fortunately, it will be close to the max. I’m afraid Social Security won’t keep up with the cost of living, Medicare premiums/deductibles will become too high, drugs won’t be covered, and that I won’t be able to pay for unexpected expenses (i.e., new $4,000 hearing aids). I can’t afford a LTC policy and have no idea what’s going to happen when I can’t take care of myself. I will most likely need to relocate to someplace less expensive than Atlanta, away from family and friends, even though I love it here.

    Maybe someone could build a retirement community for retirees like me. I could afford a home in the very low $100,000’s, with low maintenance/HOA fees. My current top choice is Hot Springs Village, AR, but I still have several years to go.

    by Louise H — October 5, 2017

  48. There are so many reasons that people have had to scale back during retirement years, and many were difficult, if not impossible, to foresee. I have numerous friends who lost their jobs in their 50s and 60s due to the shifting sands of modern life. Some had elderly family members who needed their care. Manufacturing moved to less expensive regions, technology advanced and left their skills behind, companies closed, the recession creamed their industry or they were victims of straight up ageism. Retirement funds were gutted by market crashes, poor management by trusted advisors, fraud and early withdrawals.

    Louise H, your story is one of survival under very tough conditions. I tip my hat to your ingenuity and persistence. With good luck – and you’re overdue for some – you’ll find an affordable place to live that’s nearby your support system. I wish you the best.

    by JCarol — October 5, 2017

  49. Ginger, I also buried St. Joseph when I was trying to sell my Mom’s house. It did seem to work and we sold the house pretty quickly! We dug St. Joseph back up and he is here with us now until we decide to sell our house!

    Louise H. I too congratulate you on your ability to survive under tough conditions. Maybe someone on these boards can suggest a place in Atlanta area for what price range you can afford. Best wishes!

    My Mom also lost her job, then my Dad had a stroke. She nursed him for two years then he died. She wasn’t 60 so she scraped by for about 3 years till she got on Dads SS widow benefit. It was a huge struggle for her. She had some stock dividends and two small annuities to barely get by on and she still had to pay a mortgage. UGH, what a struggle, but somehow she did it.

    I lost my job at age 58 too and never could find another one. Lucky my Hub had a good job and we survived.

    by louise — October 5, 2017

  50. Louise I agree with you about low cost housing for seniors. A SMALL community where the homes cost around $100,000 and had very low or no HOA fees, close to doctors and grocery stores sounds ideal to me. I have talked to my friends who do not want to live with their children should their life situation change (spouse pass,etc) but would not be able to afford to stay where they are. They also would like to live in a community where they could develop friendships and support each other in our daily lives.
    Also, one area no one has mentioned on this site is “gray divorce”. It is financially devastating and not something that you plan for.

    by Sunny — October 6, 2017

  51. Louise H. have you considered a manufactured home? The new ones are built very good and are very nice! My girlfriend lives in an older MF home in a mobile home park. She had to put some money into it due to age. It is very nice and hers is double wide. You can buy a new one for various prices. Here is a website to check out parks in your area and what they have for sale. You have to buy or rent your home. If you buy you must pay lot rent. It goes up every year as do apartments. Their are pros and cons to everything but this is a doable option. These homes do not appreciate in value and that is a downside for some people.
    https://www.mhvillage.com/Mobile-Homes/Mobile-Home-For-Sale.php?key=1770652

    by louise — October 6, 2017

  52. Jennifer,

    From Helene…

    Washington Post
    The New Realities Of Old Age
    By Mary Jordan and Kevin Sullivan

    Richard Dever had swabbed the campground shower stalls and emptied 20 garbage cans, and now he climbed slowly onto a John Deere mower to cut a couple acres of grass.
    “I’m going to work until I die, if I can, because I need the money,” said Dever, 74, who drove 1,400 miles to this Maine campground from his home in Indiana to take a …

    Unfortunately to protect the copyright we cannot print the rest of this article. Here is a link to the entire story, which is well worth a read!
    https://wapo.st/forgottenpensions

    Helene

    by readingfam — October 6, 2017

  53. My house was on the market 10 weeks….showed it several times a week. Nothing. Buried St Joe and got three offers in one night! One full price all cash!! I was not a believer but now……!!!!!??

    by jean breed — October 6, 2017

  54. Thanks Helene:

    As luck would have it, I found the whole article on the front page of Sunday’s Washington Post in a common area. It is frightening to me, a divorced woman, I will work as long as I can, I am glad I bought my home, a large one bedroom apartment twenty one years ago. What a mess….my fear is not my home, but the co-op fees that keep rising every year where I live. If I lived in a single family home again, I would still have to plan for future expenses.–I wonder what kinds of things those people in the article consider essential? Maintaining an RV can’t be cheap and the insurance has to be expensive as well.

    by Jennifer — October 6, 2017

  55. Fyi…mfg homes in California do appreciate….Homes built in the 70s sell for $150000, elsewhere you’d pay $50000!!!

    by mary11 — October 7, 2017

  56. Having to work beyond the usual retirement age might be a blessing in disguise. The Blue Zones project which studies the life style of people who live in regions with a large number of people living long active lives identifies working and basically never retiring as one key to healthy longevity, and there are occassional newspaper stories focusing on extreme elderly who still get up everyday and go to work; and those people are happy and thoroughly enjoy the contributions they are able to make. A lot has to do with ones outlook. If you feel not being able to retire at 65 or 66 as some sort of failure, then you will be unhappy about it. But if you see yourself as making a contribution and enjoy the social aspects of work in addition to the financial rewards, they you might just have the key to “live long and prosper”.

    by Jean — October 7, 2017

  57. mary11

    A manufactured home is not a mobile home or an RV on wheels like a tiny house–is that correct? They are grounded and hooked up to public sewers is that right? I know very little about these type of homes.

    by Jennifer — October 7, 2017

  58. Mobile and manufactured home definition: https://www.cascadeloans.com/difference-between-mobile-and-manufactured-homes/

    Manufactured homes are typically moved one time from the manufacturer to the lot they will be set up on and remain there. They are hooked up to water, sewer and electrical.

    by louise — October 7, 2017

  59. Jennifer: RVs (recreational vehicles) are also known as campers. This article explains the difference. You can either scroll through the photos and captions for a quick primer, or read the article for more in-depth information.
    https://learn.compactappliance.com/types-of-rvs-and-motorhomes/

    RV maintenance and insurance are not terribly expensive. The biggest costs are gasoline to ferry them from one campsite to the next and campsite rental.

    There are also mobile homes, manufactured homes, modular homes and tiny homes. Google searches can explain the difference. Mary11’s experience aside, homes in this category almost never appreciate. Nor do regular homes, when you think about it. Generally the land under and around the home goes up value rather than whatever’s built on it. (In a given neighborhood, new homes typically sell for more money than non-updated 50 or 60 year old homes.)

    I’d strongly recommend renting in a mobile home park before buying.

    by JCarol — October 7, 2017

  60. Absolutely mary11!! Manufactured – Mobile homes have appreciated very aggressively in Southern California the past several years. Also, the lot rents have seen very aggressive increases. Too most of the country the manufactured housing experience in Southern California would be considered very expensive. The worldwide demand for housing in Southern California is greater than the available inventory.

    by Bubbajog — October 7, 2017

  61. We’ve lived in 2 mfg homes in FL. Even had a triple wide…the homes there do lose their value. Mfg homes came to be after 1978, so actually a lot of these homes in San diego are mobile homes too, and the lot rents go from $375-500 because they have rent control. We bought a condo and the value from 1996 to now has increased by 425% . That’s why I’m selling and with the profit moving to coastal oregon …..

    by Mary11 — October 8, 2017

  62. Hello Everyone and thank you for the enlightenment about the manufactured homes. Maybe I should look for a small cottage type of home–or build one…there is a website for storybook cottages. I like charm and the amenities of a larger home with a smaller imprint. I will keep looking….where are the builders–smaller with charm would be a great selling point one would think.

    by Jennifer — October 8, 2017

  63. Jean many older people want to continue to work and make a contribution, but cannot find a job that will keep them happy doing so from what I have read on these forums. Age discrimination is alive and well and I am only speaking about those who wish to keep working for whatever reason. Many have health issues and so cannot continue and those that have had labor intensive and stressful jobs cannot wait to retire. I opt for my own business, health insurance is the only issue I have at the moment. I would definitely be making a contribution. Older people with lots of experience just do not want to be discarded.

    by Jennifer — October 8, 2017

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