You CAN Retire Successfully
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Send to a friend by YMAuthor: Maureen Sinclair
All too often, I hear about people who retired and then returned to work because they had to in order to meet their living expenses or because they could not stand not having any purpose in their lives.
To both those reasons, I say nonsense, you can retire, make ends meet and live with purpose If you really want too.
All too often, I hear about people who retired and then returned to work because they had to in order to meet their living expenses or because they could not stand not having any purpose in their lives.
To both those reasons, I say nonsense, you can retire, make ends meet and live with purpose If you really want too. I know, because I’m doing it. To be certain, in order to retire successfully, you must lay some ground work prior to doing it. In the following steps, I will tell you what I did and show you how I did it and finally, make some suggestions to tell you how you can do it too.
1. You must decide if you really want to retire. Ever since we were young, just setting off in life, we’ve been thinking about a time when we would have nothing to do but just live as we had done when we were children. That is, we would not worry about where our next meal was coming from, we would not worry about keeping a roof over our heads, we would not worry about taking care of others, we would not worry about bills, we would not worry about what others thought of what we said or did (within reason, of course) and we would not worry about not having fun. Once we settled into the 9 to 5 routine, no holidays except those carefully prescribed by law, no summer vacations, the facts of life set in and most of us really did not like being put in harness. But, for the most part, we wore that harness and did what was expected of us and talked about retirement. That’s what most of us did, including me, we just talked about it. We did not think the day would ever come and for the most part, we did nothing to plan for it. Consequently, for many of us, retirement seems impossible. Especially for woman of retirement age now, we expected to be taken care of from cradle to grave. This is particularly true if we did not have husbands to make retirement plans for us.
Think about the question: do you really want to retire? Think about what you would REALLY do, it you did not have to go to work. Each of us has to answer these questions for ourselves. I left a good paying consulting job in order to retire. I was not forced out of work by younger workers nipping at my heels or by downsizing. I left because of the things I still wanted to do while I still could do them. Looking back into the past, I remembered the things that I did or wanted to do before the realities of my life took over. I wanted to travel and I wanted to write. You also have to consider what you want to do now if you had the time to do it. For me, I want to be able to spend time with my family and especially my young grandchildren. I want to learn how to draw. I still want to travel and I still want to write. As long as I kept a full time job, I saw no way to do these things as I wanted to do them: with all my heart and full time.
2. Once the decision is made, you must carefully figure out how you will do it. I believed that it was essential that I keep myself under my own roof and that I, and I, alone owned that roof; not the bank, not a mortgage company, not any one…just me. I knew that I needed to make certain that I had health insurance and that I could keep some type of health insurance until I died. I also knew that I had to be certain that my family would not be saddled with any debt for my burial. I knew that I needed enough to keep myself fed and clothed. I knew that I would have to make certain that I could pay my utilities. I also knew that I had no retirement except for social security. Remember what I said above about women my age, and this is especially true of those us who were single mothers and solely responsible for ourselves and our children. And there are millions of us who fit this description. I knew that I had credit card debt. I also knew that the bank, and I, owned a home that had accrued some equity (I did do something right to prepare for retirement) and that the house was too big for my needs and was a huge drain on my finances.
3. Once I had made up my mind that I did want to retire and I had looked at what my needs in retirement would be, I set out to make it possible. I gave myself a dead line that within two years of all this thinking, I would be retired. To start, I looked at where I would retire. There are some places where I believe retiring, on a modest retirement income, would be almost impossible, but then, anything is possible if you want it badly enough and if you are willing to make trade-offs to made it so. I do not believe, for example, that you could find affordable housing, on a very limited budget, in New York or Beverly Hills. You could decide to live near these cities, but not in these cities. I needed to make certain that all my credit card debt has been retired and I needed to learn to live without those cards. In other words, and to the horror of the banks and credit lending institutions, I had to learn to live on a “cash only” basis. And to the horror of those same institutions, I decided that when I retired, I would live in my own home, mortgage free. And finally, and this was a shock, I looked at all those notices that I had been getting in the mail from social security and found out what I would be living on from my social security account.
4. My plan called for selling my home, selling whatever over-sized furniture I owed and for which I did not have some overly sentimental attachment. My plan called for finding a place to live where I could be happy. I needed to live close to a city, but not necessarily in one. I needed to live near water. I needed to live in a temperate climate with all four seasons. I needed to be able to buy my house outright and to put whatever I made from the sale of my older home, over and above the price of the new house, into savings. I wanted to be close to, if not my entire family, at least some part of my family.
Now here is what I did that many would consider shocking. At the age of 63, I bought a home in Canada close to my youngest son and his family. I reasoned that the American dollar would always be stronger than the Canadian so my retirement dollars would farther. Land and housing prices in Canada are much more reasonable than they are in the United States. This is particularly true of the Province that I chose to live. The house took only a little of the proceeds I recognized from the sale of my old home and that money is now in the bank and is only used for special needs and occasions. I know that some of you are thinking “why doesn’t she invest that”. Well, I would if I knew anything about investments, which I don’t. I do know that it is safe in the bank and will be there when I need it.
Now, not everyone, or possibly anyone reading this, would do what I have done with respect to leaving the United States. They also would not consider leaving the part of the country where they have lived all their lives and that is not necessary. I am willing to tell you what I did and why, but everyone has to make their own choices. I am saying that anyone can make choices that will allow them to live comfortably in retirement if that is what they want and they are willing to make changes in their life and lifestyles.
I do need to tell you that if you want to retire on a budget, you must downsize the house you live in. Do you really need a 2,000 plus, square foot home with four bedrooms? My house is a small two bedroom bungalow with one bathroom. This is the size of the houses most of us grew up in during the 50’s, 60’s and even the early ’70’s. It has a large eat-in kitchen with a walk-in pantry, an enclosed porch, and a small living room. I use one of the bedrooms as an office and work area for my various crafts. Obviously when I have company it serves as a guest bedroom too. It is easy to maintain and it is easy to heat. The taxes are low.
You should know that you can live without a mortgage and whether you retire or not, you should pay off your mortgage as soon as you can and avoid those constant notices that come in the mail advising you that you can get a low cost equity loan on your house. You pay for what you borrow, and you could, if you come on hard times, lose your house because you do not really own it until the mortgage debt is retired. I remember a time when Americans expected to pay off their mortgages and that it was considered a good thing to do so. It is still a good thing and don’t let lending institutions tell you differently. Likewise, I remember a time when it was a good thing for Americans not to be in debt to anyone. Once again, that is still a good thing and don’t let anyone tell you differently.
Although I live in Canada and do not have health insurance worries, I believe that with planning, retirees can have affordable health insurance in the United States. Combining Medicare and Medicaid with a supplemental policy (see AARP), it is possible. If I were living in the States, I would take a supplemental policy with the largest deductible I could get. In that way, you will minimize your payments and you will assure yourself of treatment. After you are on your feet you can negotiate an payment plan affordable for you, out of your available funds, to pay whatever is owed on the deductible. In addition, if I were living in the States, I would stay on top of health care issues and make certain that the Congress becomes responsible for enacting laws that make health insurance available and affordable for all Americans.
Other than health insurance, home owners insurance and car insurance no one should pay for more. And I believe that it is in your best interest to chose a high deductible on your policies to lower your costs and to keep the money in your hands. If you want, put a few thousand dollars into a bank account and keep it there as a buffer against any problem where you may have to pay the full deductible on any of your policies (do this while you are still getting a pay check).
At my death, I will not leave my family any large inheritance, but I won’t be leaving any debts that they would feel honor bound to pay. They will have the proceeds from the sale of my home and possessions to do as they please. They know that I wish to be cremated in a cheap wooden box (the box is required by law) and I want my ashes scattered in the ocean near where I live (remember, I wanted to live near water when I retired, and I do).
5. Finally, I want any one considering a successful retirement to make certain that they have a good car that is fully paid. Plan to take care of the car, and if you must ever buy another vehicle, face the fact that you will be looking at older model cars that you can afford to pay for in cash. In that same vein, since this is the 21st century, there are occasions when you need a credit card or a reasonable facsimile. A debit card can be used to purchase travel tickets and to secure hotel, motel and car reservations for the times you may want to travel. Yes, they do take debit cards. In this way, you become your own lending authority.
Now all good plans hit snags and you must be ready for them. In my case, the American dollar has lost value and now it is almost at parity with the Canadian dollar. Therefore, I have lost some spending money. But these things go up and down and I can weather this storm since I own my home and I have no debts. I call my friends and relatives in the States frequently but I always use a pre-paid card for this. In this way, I keep control of my telephone bill and pay the phone company only for their basic service and for the Internet connection. Needless to say, much of my correspondence with those back home is by email. I buy fewer clothes, and frequently buy from local consignment shops since I no longer need to “invest” in high price business suits, shoes or hosiery. I shop sales in the markets and buy fruits and vegetables in season. I do more home baking which I have always loved to do and now have the time to do it. I go to lower priced movie matinees and I eat out during the afternoon for the lower priced lunch specials. Actually, I don’t eat out as much as I did since I have the time to cook at home for my family and friends. I pay only for basic cable and no movie channels; after all how many times in a month can you see the same movie?
Am I happy? You bet I’m happy. Am I busy? You bet I’m busy. I’m happy because I am living well, but not high, and I am doing what I want. I am playing with my grand kids when I want. I am beginning to make some small profit on my writing which I do when I want. This extra income will be put aside this year to cover the increased costs of gasoline and heating fuel. Do I need this extra money? Not really because I could, with little changes, tighten my belt and still live comfortably. I am learning to speak French, which was something I always wanted to do and I am drawing and my house is full of my own art work. My art, which is reminiscent of Grandma Moses, may not be saleable, but I like it and hopefully my family and friends do too since they get it at Christmas. I travel taking advantage of the price savings from making my reservations on off seasons and far in advance of my planned trips.
Am I glad I’ve retired? Absolutely and if you really want to retire, you can do it too and be glad of it.
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