Thoughts on retirement budgeting - Page 2 - Fiberglass RV


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Old 11-20-2014, 05:01 PM   #15
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My retirement plan was based on three principles.

1) get out of debt. Once something is paid off keep making payments to yourself. Retire debt free.

2) avoid thinking of affordability as a monthly event.

3) Even if you love your job, when you work you are trading hours of your life for money. Spend accordingly. Raz
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Old 11-20-2014, 05:11 PM   #16
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Seriously? Wow! I wonder if the numbers are close in Canada. 60% have less than $25k? That wouldn't last mare than one year into retirement. It almost makes me feel selfish for wanting MUCH more for myself.

I wonder if they took into account whether or not they own their own homes, but still.......

Some people do have pensions though, which will help them out some. I don't have anything, but the pittance that I will get from the government at 65.
The surprising thing to me was that even when employers offered a 401K match most employees still did not participate or fully participate in their employeers 401 K. I have attended several retirement seminars and one of the common threads was that you should plan on Social Security to provide no more than 1/3 of your retirement income and you should have at least 8 times your highest yearly income saved for retirement. (Presuming you wish to maintain your present standard of living) These numbers / rules may be inflated because the people running the seminars were paid financial planners but the concept of saving for retirement is still valid. I am not pretending to be an expert on retirement and am only parroting what I have been told. Even so the numbers seem to indicate that most Americans are financially ill prepared for retirement
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Old 11-20-2014, 05:53 PM   #17
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I retired at 58 with no outside source of income. We have traveled for 14 years.

Our per year expenses were dramatically less than our working life expenses.

Before we retired we moved to a smaller home, a less taxed state and a different way of living. I believe there's an assumption for many that you will live as you have lived. Certainly that's what many want. For us we chose different, less but more. We spend a lot less than we did before we retired but really feel we have more.
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Old 11-20-2014, 07:04 PM   #18
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Reading some of the posts in this thread is somewhat depressing. Makes me glad I planned for retirement and entered it at age 62-1/2 debt free. Guess I should consider myself fortunate.


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Old 11-20-2014, 07:42 PM   #19
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I retired at 48. I lived on just what my pension was and that has worked out great. I'm now 64. Indeed, it is possible to tap into one's "savings," but if you don't have to, why do it? My idea is that those funds are for the time when I need assisted care.

Living frugally does not mean living on the cheap! It is always sensible to live below one's means and save, even as an older person.
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Old 11-20-2014, 08:01 PM   #20
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I good friend of mine has reminded me many times... it's not how much money you earn (pension, 401k, Social Security, whatever)... it's how much money you SPEND.

You have to figure income to outgo... no matter WHAT!
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Old 11-21-2014, 09:03 AM   #21
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"It's not what you earn, it is how much you spend". I heard this version many, many years ago, and it is true. While I do like to spend, and do to some extent, I have seen others that spend whatever they get.......and more!

I have never used borrowing for anything other than what I see as investments, and even with two of my vehicles over time that I did use financing, I did so because I could leverage the money for better use elsewhere.

I do realize that to some degree I will need to spend less money upon retirement. I do still hope to do a bit of destination travel, as well as spend a horde of time towing my trailer about. I guess I just want to plan for the worst, and best, case scenario.

I know I do need to right-size my house, as I have renovated and added on lots over the years, but as empty nesters we sure do not need 3,500 sf of living space, and a 1/4 acre of yard (at least a manicured one), though my oversized double garage (which is really a workshop), does need to be upsized a wee bit .
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Old 11-21-2014, 10:28 AM   #22
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Originally Posted by P. Raz View Post
My retirement plan was based on three principles.

1) get out of debt. Once something is paid off keep making payments to yourself. Retire debt free.

2) avoid thinking of affordability as a monthly event.

3) Even if you love your job, when you work you are trading hours of your life for money. Spend accordingly. Raz
Agreed on 1 and 3 but I don't know what you mean by 2.

I found that when I had direct withdrawal for a payment for a car, and it was paid off, that I could just redirect that chunk to savings with no pain. It turned out when I needed the next car I had a huge down payment, next car after that was cash.

I think the hardest thing to plan for is ill health- but having a paid-off house means you can always either sell it or get a reverse mortgage if you run out of money or need to go into assisted living.
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Old 11-21-2014, 11:35 AM   #23
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I know I do need to right-size my house, as I have renovated and added on lots over the years, but as empty nesters we sure do not need 3,500 sf of living space, and a 1/4 acre of yard (at least a manicured one), though my oversized double garage (which is really a workshop), does need to be upsized a wee bit .
I can relate..... a few years ago I thought I was ready to right size my home.... put it on the market prior to looking for a replacement as I wanted to sell and know what I had to spend prior to falling in love with a new place I thought I had to have. As a result I did not really start looking for a replacement until the day I had to go out while my home was being shown! Dang! Seems that although I could right-size the house I could not right-size the garage and property for my cars, trailer and other toys and hobbies!! After looking around & to annoyance of the realtor I turned down offers on the house and pulled the listing as soon as i could! Now taking a different approach ..... keep looking until I find a place that has what I need and in the right location! 4 years later still haven't found it!
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Old 11-21-2014, 12:03 PM   #24
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Agreed on 1 and 3 but I don't know what you mean by 2.
Didn't mean to be cryptic. Basing affordability on a monthly payment and not the total cost. Buying something for $1000 at $20/ mo. could end up costing a lot more than $1000. But it's only $20/mo.
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Old 11-21-2014, 12:22 PM   #25
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Didn't mean to be cryptic. Basing affordability on a monthly payment and not the total cost. Buying something for $1000 at $20/ mo. could end up costing a lot more than $1000. But it's only $20/mo.
I understand what you're talking about. I had a neighbor that would look at purchases strickly on monthly purchase cost. I can buy that trailer it's only $150.00 per month example. I on the other hand don't like paying interest, I figure I have a better use for my money than giving it away like that.
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Old 11-21-2014, 12:50 PM   #26
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I on the other hand don't like paying interest, I figure I have a better use for my money than giving it away like that.
Interest and fees.
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Old 11-21-2014, 01:06 PM   #27
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The best way to borrow is to loan your money to a bank and get the best rate and then borrow it back, there are limits on the rate they can charge you, normally not more than 1-2 points in excess of what they are paying you because there is -0- risk involved, and risk is what determines your rate of interest charged. The interesting thing happens about midway thru the term, they start paying you more than you are paying them. In the end, the cost is minimal and your money is still in the bank.
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Old 11-21-2014, 01:29 PM   #28
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I am a fan of using leverage, where I borrow using a low mortgage rate around 3%, and to invest the funds in something that will (hopefully) return better. It has worked out in my favour fairly well for the most part, using someone else's money to invest for my profit. Not a get rich quick scheme though at the level I do it at.
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