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I find it interesting that when people think of "Retirement Planning", they catagorize it as only investments, paying off the house, savings, IRA's and Pension Plans. IMHO, if that is your only focus, you're missing something. This causes some people to get desperate, because for a variety of reasons, they might have discovered too late that they didn't save enough to maintain their lifestyle. Actually, my recommendation would be too look at what you are doing with your money in its entirety. That is to say, how much are you spending? So there's a lot of factors to look at. Do you need a new car? Do you really need to drive that truck or SUV that guzzles gas? Do you really need to eat out 5 days a week? Do you really need a closet full of clothes, or 50 pairs of shoes? IMHO, lots of folks spend and waste a lot of money on stuff they really don't need. EG: A small house costs less to purchase, finance, insure, heat, cool, maintain and the taxes should be less. So my lesson is, don't just look at how much you're saving. You're spending a lot more than you're saving generally. Take a closer look at that.
Granted, the financial aspects of retirement are central to one's post-retirement existence. But, even beyond the financial considerations, there are huge "How will I spend my time" issues at the core of the human search for significance and purpose in life. IMO, there needs to be more focus on figuring out "Who am I - apart from my career?" ... and planning for that. (Because in retirement, nobody really cares what you did or what position/s you held.)
I still work, 61 1/2..(gotta add the 1/2) and retirement is an on going conversation with several co-workers. What I learned years ago, as I wanted to be more "need" aware and not "want" aware. I now look at something I am contemplating buying and ask myself... how many hours do I have to work to pay for this or that? Nine times out of 10, that does the trick for me. I then realize, I live quite well without whatever it was and generally already have enough of whatever it was...like shoes.
I find it interesting that when people think of "Retirement Planning", they catagorize it as only investments, paying off the house, savings, IRA's and Pension Plans. IMHO, if that is your only focus, you're missing something. This causes some people to get desperate, because for a variety of reasons, they might have discovered too late that they didn't save enough to maintain their lifestyle. Actually, my recommendation would be too look at what you are doing with your money in its entirety. That is to say, how much are you spending? So there's a lot of factors to look at. Do you need a new car? Do you really need to drive that truck or SUV that guzzles gas? Do you really need to eat out 5 days a week? Do you really need a closet full of clothes, or 50 pairs of shoes? IMHO, lots of folks spend and waste a lot of money on stuff they really don't need. EG: A small house costs less to purchase, finance, insure, heat, cool, maintain and the taxes should be less. So my lesson is, don't just look at how much you're saving. You're spending a lot more than you're saving generally. Take a closer look at that.
No one could argue against your position that income and expenses have to somehow match up. And that means one has to look carefully at both as part of "retirement planning". That is why I always find it a bit ridiculous that people say we need X amount to retire, as in one million or some other amount. What we need to retire is driven by our lifestyle and the expenses required to maintain it.
But I don't think the frugality aspect has been ignored in the Retirement Forum. There have been plenty of threads over the years which address it. There is an active thread right now about having or not having a single family house after a certain age, and costs are a big part of that discussion.
EscortR: Here Here!!!. I'm not saying that the spending side of the equation has been ignored on this forum. Hardly. All I'm saying is that a lot of folks come on this forum wringing their hands about how much is in their retirement savings, and not looking at everything else. I've even heard people who were on the verge of retirement worried because they thought they couldn't keep up their current lifestyle. True. I'm sure that most folks will suffer a cut in income/ spendable money when they retire. My point was that folks should not stress out about it, especially if they are getting close to retirement and know they haven't got as much as they think they should have. Or maybe they look at their job and wonder how they are going to save as much as the "experts" recommend. My point is, there's more than one way to skin a cat. Look at your spending first. Get creative. Become a cheapskate. Don't be afraid of a change in your lifestyle.
I personally think this is a great forum with some great folks on it and read most of your responses. Some very sharp, wise, and experienced people here.
No one could argue against your position that income and expenses have to somehow match up. And that means one has to look carefully at both as part of "retirement planning". That is why I always find it a bit ridiculous that people say we need X amount to retire, as in one million or some other amount. What we need to retire is driven by our lifestyle and the expenses required to maintain it.
But I don't think the frugality aspect has been ignored in the Retirement Forum. There have been plenty of threads over the years which address it. There is an active thread right now about having or not having a single family house after a certain age, and costs are a big part of that discussion.
i am in your camp as well . expenses are the way to figure ,but not just by figuring bills. the descretionary spending part sometimes may require even a bigger budget than the bills.
all depends on wants ,dreams ,goals and needs . location is going to be the biggest driver.
It is not how much we spend in retirement that is most important.
It isn't how much we bring in during retirement that is most important.
It is the percentage of income that we spend in retirement that is most important and that is all over the place as we are all different in spending and income.
Go forth and find your own equilibrium and comfort zone.
I think you need to look at both the income and spending side of the equation, while you still have enough working years left before retirement to make a difference in the end results. Investing in yourself, educating yourself to work in a career that pays much higher than the average, and at the same time living far below what your income will support, living well below your means. Some people that earn a lot of money, spend it all on expensive homes, luxury cars, luxury clothing, and other high-life items, while saving nothing, racking up credit cards and maintaining high balances while slowly paying off a 30 year mortgage.
A high paying career allows you to pay yourself first, maxing your retirement accounts, pay off all credit cards and pay off your mortgage early. You then can be able to live off a fraction of your income as your budget, after you paid yourself. You will then have a good idea in retirement how much you can live on if you've been living on a fraction of your income for years. You then determine how much your income stream will be in retirement. In our case, we can live off only our pensions, without spending SSI or the retirement accounts, and spend the same amount we've spent each year for the past decade. However, we could spend additional money on a second home and snowbird or easily afford to move to a location with a better climate.
What do you do when you retire? That might be a problem for people who consider work their whole life. We don't consider that work is our life or that we are defined by work. Work is something we do to save enough money, so we never have to work again. When we take vacations, we consider them 'practice retirements'. Our vacations are never long enough. When we do retire, it will be like a vacation where every day of the week is just like a Saturday, except it is less crowded because the working people are stuck at work.
You can learn how to prepare yourself for retirement by reading "The Millionaire Next Door". This is a book that describes how people can become millionaires. Most millionaires live pretty similar lives to people that are not millionaires. They do not fly around in a private jet, they typically don't own a luxury car, and they do not shop at Neiman Marcus. You can read the book for free if you Google, "The Millionaire Next Door PDF", you will find it.
After you have educated yourself for a high paying career, studying the difficult subject matter, instead of floating through college partying all the time, your lifetime earnings will be increased from a few years of struggling in school. This sets you up for good life, if bad luck doesn't knock you down along the way. You can then afford to live well below your means and save a lot of money for retirement. This sets you up to retire comfortably.
This discussion seems to be limited to savings and spending....again money. Retirement planning should be about much more than money. jghorton mentioned this above. Retirement planning should include not just financial aspects, but your plans for living and continuing to be engaged with life. For most of us that means changing directions and new goals and plans. Few bother with these plans and the result is a high death rate immediately after retirement. Here is one simple article explaining that death rates after retirement can be doubled: Does Working Longer Increase Your Lifespan? - CBS News
When I worked, long and hard hours, I was exhausted and spent almost every Saturday afternoon taking a nice nap and trying to catch up. Some people look at retirement as catching up from a long life of working. If so, you can expect a shorter lifespan. Instead I recommend considering the following before retiring:
Beyond eating, sleeping, watching TV and going shopping, how do you plan to spend your time in retirement?
What do you want to accomplish with the rest of your life?
What do you want to learn? How are you going to learn? Have you considered more education?
What hobbies do you want to pursue? Now for the hard part: what do you want to accomplish with these hobbies?
What are you going to do that will keep you engaged with other people, including people outside of your group of immediate family and friends?
What are you going to do to make the world a better place?
What legacy will you leave behind?
When you are dead, what do you want others to remember about you?
Regardless of finances, if you do not have pretty solid answers for these and related questions, I think you may need to do a lot more to plan for retirement.
Last edited by jrkliny; 09-20-2014 at 12:30 PM..
Reason: typo
In many cases retirement is just a continuation of life just with more time to do it in. A couple of examples from the above suggestions. What do you want to learn? If you already are a life long learner you just continue on. Why a need to develop hobbies to pursue if you already have them and now more time to do them in. As far as engagement with people the need for varies with the individual as does the need to make the world a better place. What do you want to accomplish with the rest of your life? For some it is lowering their golf score or reading more and more books and killing a couple of birds with one stone. Perhaps the key thing for non financial retirement is to know yourself and how that will project with the increased free time you will have. Life always brings changes and perhaps what is most important is being sure you have what YOU personally need to adapt.
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