What if you didn't plan for retirement? (state, retired, friends)
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Congratulations on your upcoming retirements! I know California is expensive, but Tennessee is MUCH cheaper. Just be sensible about life and you should be fine. Buy a home in a walkable location, learn the fine art of enjoying cheap entertainment, and try to limit travel. Keep only one car, if possible. Be mindful of medical expenses and don't skimp on a Medicare Supplement policy. Try to buy in a community with a hospital. Think about future home and yard maintenance 20 years from now and be careful what you buy. A three story Victorian with gingerbread might not be the choice now. It is easier/cheaper to buy now with a first floor bedroom and bathroom, or in an elevator condo, than to have to move twice! Will you be having a Boomerang kid and grandchild move back in? Visitors? Get a 3 bedroom home. Plan ahead and don't buy in an adult only community. Just buy an ordinary home in a regular neighborhood and stay put. Live modestly, make friends, and have fun.
You will be fine!
Great Post!!! And I suggest a 2- or 3-bedroom condo. So much easier to maintain. In possibly a 55+ community.
I'm curious as to why neither one of you thought about retirement. Why not, did it surprise you that you suddenly were that age ? What else were you thinking about ? I find it unbelievable that you wait until your in your 60's and say "Hey, were almost ready to retire, what should we do "? I thought about it and started planning for it as soon as we got married in our 20's. It sounds to me like you should be OK with what you have but you'll have to be careful not to waste $'s. I hope it all works out for you, but for the life of me, I can't see how you didn't look ahead.
Thank you all so much for your replies! All advice is appreciated. I'm just a natural worrier . We will be living on substantially less than we are now but that will be fine. We've done it before and can do it again. We aren't big travelers and we don't spend much on entertainment. Eating out is something we do enjoy. We are thinking of a condo...no yard maintenance to worry about. Tn. has cheap utilities. Good water and lots of it . We're both familiar with the town we're planning on moving to in TN.
I'm curious as to why neither one of you thought about retirement. Why not, did it surprise you that you suddenly were that age ? What else were you thinking about ? I find it unbelievable that you wait until your in your 60's and say "Hey, were almost ready to retire, what should we do "? I thought about it and started planning for it as soon as we got married in our 20's. It sounds to me like you should be OK with what you have but you'll have to be careful not to waste $'s. I hope it all works out for you, but for the life of me, I can't see how you didn't look ahead.
We did think of retirement at some point. But obviously we should have started earlier. We have some investment accounts. But with decreases in the stock market over the years it isn't as much as we thought it would be. We didn't get married until we were 43. And neither of knew anything about investments, etc. Neither did our parents. Having $500,000 plus SS seemed like a lot. Now it doesn't.
Last edited by CRobin4564; 08-08-2014 at 10:06 PM..
We did think of retirement at some point. But obviously we should have started earlier. We have some investment accounts. But with decreases in the stock market over the years it isn't as much as we thought it would be. We didn't get married until we were 43. And neither of knew anything about investments, etc. Neither did our parents. Having $500,000 plus SS seemed like a lot. Now it doesn't.
It is understandable and happens a lot. At least you did some savings and that can be a good emergency fund for medical (heaven hope not). Otherwise you should be okay. TN is where we are thinking as well. It has a lot of what we want in a home not the least of which being good moderate temperature and a tax structure that is good for us. Best of luck. You did get some great suggestions here and since you are familiar with the TN you should be fine.
I can't see your money lasting you another 20 years (unless you outright bought a condo/house and don't have a mortgage payment or pay rent and/or you can live on your $3000/mo.** -- and I think you can in TN), and, all things being equal, you could live another 20 years. Just remember that at 70, you can go back to work (PT or FT) without your SS being impacted. OR over the next 5 years, you could set the foundation for a small work-from-home business. And if you're in good health at age 70 -- why not.
**Just remember that your annual COLA is not going to keep pace with inflation. On the other hand, I've been retired for 8.5 years now: Altho' I've watched my grocery budget almost double during that time, and certainly other things have increased in price (like gasoline), I really am not worse off financially than I was 8.5 years ago. At least not significantly -- certainly nothing to be concerned about.
Oh, one last thing -- if you haven't been doing it you need to do it now: keep a monthly budget and an annual budget either on paper or on Excel (I love Excel). I cannot stress enough the importance of having a budget written down/on Excel (or some other software specifically for budgeting). And don't forget to include line items for recreation allowance (you said you like to eat out) and savings (savings: for things that don't come up every month, like teeth cleanings at your dentist's office and car tag, for example).
you bring up a good point that is only now starting to come up in the retirement equation.
retiree spending patterns are belived to shift over time.
they buy and do less stuff as time goes on and are less effected by inflation. the fall off in what they aren't doing or spending has been greater then inflation increasing what they do buy. this becomes even truer when a paid off home is involved.
the result is while all these calculators plan for a yearly raise by inflation that hasn't been the case. retirees more or less have been spending at a constant rate offsetting the increases with less doing and buying.
you actually may need 20-30% less then these calculators tell you that you need.
There is a thread on the economic board about those of us who live on $20k a year. You have almost double that and while I don't think 2 can live as cheaply as one, two can live cheaper than one.
I have lived on around $20k a year for a long time and all of the time before that it was less than $20k. I think I have a nice life. I travel some, I have good food to eat, I have friends I enjoy, I have family around and we get along well and help each other out. I own a small twin home with a small yard.
For myself I figure my house is my long term care money. If I get to that point(and I have no relative that didn't live on there own until days before their death) I will sell my home and use that money to pay for long term care. There is no dementia in my family and I had relatives who lived well into their 90's, so I am not too concerned. I think the insurance companies like to create needs.... I did buy this last home with the eye to being older-no steps, wider doors and halls, walk in shower, it is actually handicap assessable.
Last edited by Aqua Blue; 08-09-2014 at 07:48 AM..
My husband is 64, I'm 65. We got married later in life and neither one of us knew much throughout our lives about saving or investment. So here we are. If we're lucky we might end up with $250,000 in investments, $300,000 when we sell our home plus $3000 approx. from SS per month. We live in CA but are planning on moving to a small town in TN. I wonder if we can manage? I mean we have to manage but it is scary.
It's true that no one can really say, without knowing all the circumstances, what your expenses would be or your expectations for retirement, whether or not you could manage on the money that you state you have. But I'll say this, a lot of people manage on a lot less than the amount of money you are talking about..
And I'd think that hands down, living in TN in a small town would be less draining on the finances than living in CA.
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Congratulations on your upcoming retirements! I know California is expensive, but Tennessee is MUCH cheaper. Just be sensible about life and you should be fine. Buy a home in a walkable location, learn the fine art of enjoying cheap entertainment, and try to limit travel. Keep only one car, if possible. Be mindful of medical expenses and don't skimp on a Medicare Supplement policy. Try to buy in a community with a hospital. Think about future home and yard maintenance 20 years from now and be careful what you buy. A three story Victorian with gingerbread might not be the choice now. It is easier/cheaper to buy now with a first floor bedroom and bathroom, or in an elevator condo, than to have to move twice! Will you be having a Boomerang kid and grandchild move back in? Visitors? Get a 3 bedroom home. Plan ahead and don't buy in an adult only community. Just buy an ordinary home in a regular neighborhood and stay put. Live modestly, make friends, and have fun. 
