1/7/2014 4:15 PM ET|
7 realistic strategies for retirement
Preparing for retirement can be tricky – and daunting. Here's how to ensure you'll have enough money to go forward.
Don't let financial experts scare you. It's in their interest to persuade you to save more money than you really need and hand over your nest egg for them to handle. Then they can skim off 1 or 2 percent as a profit every year.
2. Downsize your housing. Some people hang on to their old suburban home in case the kids want to move back in. But this is a "what if," while the expense of carrying a home is a certainty. If your retirement budget is limited, then move to a smaller place in a less-expensive neighborhood, with lower taxes and less maintenance. Don't put off the move because the real estate market is shaky. You may sell your old home for less, but you will also pay less for a new place.
3. Don't subsidize your kids' lifestyles. The old saying tells us to give our children roots and wings: Roots to know where home is and wings to fly away. It may be hard to say no to your children. But it doesn't really help anyone to let them settle into their old bedroom after college. They need to find their own apartment, cook their own food and learn to live on their own. If you do decide a child can live at home, make them pay rent and share other costs. It's only fair to both you and your other children.
4. Share and share alike. An alternative to having your kids move in with you is to move in with your kids. Then you should pay rent, but it's less expensive than carrying your own place. If you're single, consider sharing a home with a friend or sibling. Two can certainly live cheaper than one. Maybe you can also share a computer, TV or car. Living with someone offers companionship as well.
5. Go international. At the other end of the spectrum, some people have pulled up stakes and moved to another country. There are retirement enclaves in Latin America, from Mexico to Costa Rica to Ecuador. Some Americans retire to the land of their grandparents, in Italy or Ireland, where they enjoy support from family members. Some people tout the attractions of Malaysia and Thailand. These countries are relatively safe, the cost of living is low and local people respect the elderly. Retiring overseas requires a lot of research, but it's an option more people are considering.
6. Search out free entertainment. If you want to live in London or cruise the Mediterranean, you'll need 100 percent of your pre-retirement income. But most people don't do that. Your own hometown offers low-cost entertainment options, from summer concerts to fall festivals to senior exercise classes in the winter. Check out the library for free seminars, book clubs, movies and lectures. Your church, veterans association or social club can provide many rewarding activities for your leisure time, all at little or no cost.
7. Take advantage of senior citizen discounts. Join AARP for discounts as well as supplemental medical insurance. Drive over to town hall and find out about real estate tax breaks, as well as other senior citizen discounts. While you're there, check out senior programs like free transportation, low-cost meals and health and medical services. Many municipalities offer programs that are underutilized simply because people don't know about them, or are too embarrassed to ask. But let's get real. The services are available, so take advantage of them.
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It is all about priorities and what makes you happy. My husband and I live on 30% of what we made when working. Our home and vehicle is paid off, we have no bills other than utilities and food. At this point in our life, we do not need more furniture or stuff. We enjoy the movies and going out to dinner. We enjoy time with family.
We live in a 55+ community that has so many things to do every day and all kinds of special events happening every month. We have made so many new friendships since retiring and have the time to nurture them. The socialization will keep you young and happy, not money.
There are a lot of things in life that cost nothing or a very minimal cost. To me, money never equated to general happiness in life. If money did equal happiness, than why do so many people who make a lot of money end up dead or in rehab, over and over again?
I didn't retire as planned. My career left me ten years before I had expected to leave it, so we had to make some alternate plans. We're never going to tour the world, but this year I get to fill out a 1040EZ for the first time since I graduated from college.
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