How did you decide

BigMamaApril 24, 2003

on the amount it would take for you to live on after retirement. My DH and I plan to go into retirement with to fairly new paid for vehicles and our home either paid for or the money stashed to make payments (depending on which fits better financially) and the only expenses we will have will be living expenses. We seem to have a vastly different idea of what it will take to live on....

So how did you decide on the amount to expect to spend or have ..We added up all of our expenditures for the year for clothing food etc and find that it is easily managable but we (mostly he) are nervous.

Did you determine the amount of just grab a figure out of the air or have a fixed amount that you knew you would have to live with.

I think my husband is being overly cautious about the amount we will need...but then he has never had to live on a womans income and raising a child at that....

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I figured on how much I needed to make my mtge and utility payments each month and then figured if I would take in that much. Everything else was gravy.

    Bookmark   April 25, 2003 at 12:57AM
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OK this question didn't get many responses so here is another one....

When you were saving for retirement....did you retire when you hit that amount or was the retirement factor based on age or what.

    Bookmark   April 25, 2003 at 12:34PM
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I'm sorry this forum isn't more active - wish there was something we could do about that. We are planning to retire in 4 years. We expect to have a 90% pension and a nice nest egg. Our retirement date will definitely be determined by the size of our savings.

    Bookmark   April 26, 2003 at 9:55PM
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Many say that quite a few'll spend a substantial amount in the first year (maybe more) after retirement - taking those extended trips, cruises, etc. that wouldn't fit into vacation time in earlier years.

And spend heavily in the last year of life - usually for medically-related things.

A rough number that some use in estimating post-retirement income is something like 70% of what it was before.

Plan to spend only a very small portion of your retirement nest-egg in the first few years. Don't forget - once it's spent, it isn't there to earn any more. Which'll mean that you'll have to spend even a larger amount of the nest-egg, next year - if you don't wish to make a steady diet of turnips in even later years.

Also - the number of dollars that you'll need to spend for necessities in 10 and 20 years' time will be much more than now, due to inflation.

Don't forget that inflation is always with us - and remember that in some years not too long ago, the rates were much higher than we've experienced lately.

Remember how we all cried the blues, then?

We used to work for 40 years and retire for 10 (often less). But now we work for 35 years or less (for some), and retire for 25. Fewer years to earn, more years when we'll need to spend.

Are you interested in doing some casual, home-based work after retirement? Do you have a product or, preferably, a knowledge-based capability? The information comes out of your head. Can be transferred easily by internet, often. But you must buy and inventory, insure, deliver, etc. any products that you offer. Unless you pay an agency to do that: storage, insurance, shipping, etc. But they want a price for that.

What suggestions do others have?

Good wishes to a happy, healthy, prosperous retirement - with lots of true friends.

joyful guy.

    Bookmark   April 28, 2003 at 6:23AM
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I think one way some are making pocket money is by getting rid of things on EBAY. I haven't done it yet but DS is going to get me set up. Goodbye to some of those plates and knick knacks in storage boxes - I hope!!

    Bookmark   April 29, 2003 at 7:50PM
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We knew about what to expect in the way of retirement money. So about two years before we took the big step, we "practiced living on only that. It was hard. In fact impossible. And that is why I still work part time.

I would suggest that you pull your canceled checks for two years. group them into two piles, fixed and opitional. Be sure and include bank fees, EVERYTHING. Put it down on a chart and get an average of what it took. See what you need for "spending money" per week (groceries, gasoline all the things you pay cash for) Take a good hard look at what you really needed to spend money on and what you could have done without.

Then figure at least that much plus a little for inflation. And add on something to put aside each month for an emergency fund, unexpected repairs, etc. Give yourself an allowence and don't spend anything more than that for extras. Practice for a year. Then refigure and adjust.

    Bookmark   April 29, 2003 at 8:42PM
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I've heard that 70% figure over and over again. But I think that only applies to the martini lunch crowd. For those of us who live frugally to begin with, I think retirement probably means little or no reduction in expenses.


    Bookmark   July 9, 2003 at 2:38PM
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Hi Teri2,

I think that you may be right - many people figuring those numbers are those with substantial income.

Many frugalers took their lunch and a thermos of coffee to work, so may find that their reduction in cost amounts to some cosmetics and clothing, gas for driving, possibly one less vehicle.

But - they'll have time to travel, attend gatherings, social affairs, clubs (with fees), etc. - many requiring gas, so the supposed saving in gas may be somewhat illusory.

Also, most working people don't plan to save this year in order to subsidize expenses next year - until recent years, they more or less thought that increases in income would balance off increased expenses. Which it has not, in recent years.

But few retired people have anything like enough of an inflation factor built into their pension entitlement to offset possible increase in expenses in future years.

So, especially shortly after retirement, they more than likely need to be saving part of their current retirement income in order to enable them to live in reasonable comfort in future years.

Many will need a possibly extended period of quite expensive accomodation in a retirement residence, nursing home, etc. prior to the end of life, as well.

Lacking offspring one may desire to leave some residue for churches, public health services, universities, charities, etc. and to arrange for a few thousand to cover one's funeral and burial, income tax and other amounts owed. Then, to spend the last dollar on the last day of one's life.

Anyone know how to arrange that?

Apart from suicide, which few want to ontemplate.

Your experiences, opinions, please?

Good wishes for continued health of body, mind, psyche and spirit throughout your retirement.

joyful guy

    Bookmark   July 14, 2003 at 6:28PM
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We didn't make any plans for retirement except to have our home paid for and no outstanding bills except for a car. We went to the company retirement seminars and the way they tore up the dollar bill they used in their lecture was a worry. But we had saved so much the last few years before retirement, that we felt rich when we got our retirement checks. My husband signed papers that gave me his full retirement check if I outlive him. We are well fixed and I have changed from the saving mode to SPENDING! We are fortunate that he has a pension with his company, we do not have to have draw on our savings to live. So we are enjoying our savings.

    Bookmark   July 21, 2003 at 12:17AM
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Is there a reduction in the amount of your husband's pension cheque going to his surviving spouse?

In quite a few cases it drops to something like 60%.

I believe that my private pension does that - and, lacking a spouse, I am allowed by my private pension carrier to choose an alternate receiver. But my self-proud sister-in-law, whose husband died just over twenty-five years ago, when her three kids were just into their teens, refuses to allow me to choose her to be that alternate.

Since 1966 all Canadian employees have paid into the Canada Pension Plan, and the surviving spouse has benefit cut to 60%.

Also, everyone (who has fulfilled certain residence requirements - including stay-at-home housewives, which was true of many now-retired women) receives benefits from our Old Age Security.

When one spouse dies, the family's former Old Age Security income is cut in half - as the deceased spouse's cheque stops, of course.

In my expereince as a clergyperson and, later, financial advisor, I've heard many rather frugal retirees chortle and say that they've never had it so good.

I've suggested to quite a few that they give some thought to what position they'd be in if their private pension was cut to 60% (or whatever) if the basic pensioner dies and the benefit continues to the spouse, their Canada Pension cut to 60%, and their Old Age Security cut to half of its current amount, if the former wage-earner dies.

Some, having given little thought to that eventuality, have appreciuated my having started them thinking along that line.

Good wishes to you and yours,

joyful guy

    Bookmark   July 29, 2003 at 9:42PM
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He wanted me to go with him to the meeting at his company. The lady said, "do you realise how lucky you are to be included in this? Most wives just sign away their pension rights". I know I have a good husband, he wanted to do this and he had to give up $125 a month, he recieves almost $900. now. I am 10 years older than he is so will probably out live him, he wanted me to be comfortable. As far as social security goes at his death, I have been told that my soc sec check will probably go up to what he is drawing, so I will lose my $448 dollars. So I will be alright.

My husband has been diagnosed with Alzheimers, but I don't believe he has it. He is on meds to delay it and they should work for 1 1/2 years, so won't know for sure until/if it stops working. What I wanted to say is....We went to a lawyer to see what would be left for me if he has to go to a care home. Here in Kansas SRS will give me one half of our savings up to $90,000, they take all above that. They will also let me have $1450. a month of our monthly income, the house and the car. I think that is very fair. I was concerned that we should have taken out nursing home insurance. but we will be ok it either of us has to go to a home.

    Bookmark   August 1, 2003 at 6:13PM
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Thank you for sharing.

I am sorry to hear of the diagnosis of Alzheimer's. I hope that it is in error - or, if not, that onset of symptoms delayed. Their reference to it as "the long good-bye" describes it well, unfortunately.

Good wishes for continued good physical, mental, psychic and emotional health for you and yours.

Also to other posters here.

ole joyful

    Bookmark   August 7, 2003 at 9:57PM
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Fortunately, my DH has planned well for us too. I retired with the minimum number of years possible, and he has told me not to put him as a beneficiary and to take the maximum amount for my retirement to use just for me. After my death, the pension stops. Luckily, he has planned well for me in case he leaves this world first. My retirement is just a little extra for me. :)) I do wish that everyone was this fortunate. I am truly grateful, and hope that all works out well for the rest of you. Of course, I do realize that a catostrophic illness can wipe out a chunk of change really fast. We will pray that that doesn't happen. I have seen people in their seventies having to work. I feel so much for them. I pray that doesn't happen to us or any of you.

    Bookmark   August 9, 2003 at 7:03PM
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We both decided that being low income was better than working in jobs we hated....we own our own home and our cars....I have to be frugal but we are really happy with our decisions.

    Bookmark   August 9, 2003 at 11:10PM
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As joyfulguy stated, it's inflation and the 'unknown' expenses that most forget to plow into the equation.
Those unexpected dental bills, medical problems and/or surgeries, home repairs, car maintenance, replacement of appliances, insurance premiums, increase in utilities and costs of hobbies/entertainment.

We also looked at the 'life' of major appliances in our house, figured out their cost of replacement (including inflation), divided by x number of years and added this to our expected monthly cost of living. Of course, this was just one of many expenses that we had to consider when retiring, but it was as eye opener as to how much it can add up to.

    Bookmark   August 12, 2003 at 5:48PM
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When I was 62 I chose to collect my SS benefit, which back then, along with my savings and investments, I thot would be sufficient to live on in a modest fashion. However, I didn't count on a long life (I'm now 87+) and no interest on my savings and a stock market debacle. The short, short story is - you can't really plan on anything - there is no security. Lloyd

    Bookmark   August 16, 2003 at 4:40PM
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Yes, Lloyd - making such plans can be nothing but an indefinite exercise, as there are so many variables - and so many unknowns.

Who would have thought that bonds would pay 20% in 1981 - and next to nothing, now?

Actually - less than nothing.

For the income tax people want their share of the take, annually.

And one must take an amount about equal to the rate of inflation from the current income to add to the asset in order to preserve purchasing power.

What's left -if any - is one's actual income for the year.

Peanuts, at best, at present.

Despite there being so many scams there - there are some useful things that one can do for some extra income on the internet, these days.

If one has a skill in the realm of ideas that others may want, it's very simple to transfer ideas on the internet - all it takes is a few clicks of the mouse to send hundreds of messages.

Much easier than to buy, unload, store, insure, sell, package, load and ship products. And deal with deadbeats.

If the client doesn't pay for the idea that you sent - you're not out any money, as you are with a product which cost in various ways to obtain, then deliver to the client.

Good wishes for a prolonged, healthy, interesting retirement with good friends and enough income to be comfortable.

ole joyful

    Bookmark   August 18, 2003 at 4:35AM
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Since I started posting on this forum ages ago, we are down to only 9 months to go. We have our land, our houseplan, our builder etc all lined up. We joined hands about 15 years ago and neithter of us had very much except for a glimpse into the future so we have spent the last 15 years accumulating a savings so we approach retirement with a good outlook. With what we have managed to save with an aggressive approach to it and with equity accrued in our home etc.....we actually look forward to a pretty decent lifestyle.....nothing high on the horse or high falutin but certainly good enough that we can travel and do pretty much what we please...

we managed to do it "aggressively, partly because we were willing to move to boost the income and we did it many times in the last 15 years....and every time our income increased by 30 or 40K, we socked it away instead of raising our style of living..We have a nice home...nice cars..and we do pretty much what we want....but we just decided that we wanted to continue to live comfortably at retirement and in order to do that.....we just socked away all the pay increases from the job changes. The nice thing about it is that we haven't had to sacrifice our at the moment lifestyle to do it....

As I see it way too many people don't think ahead to retirement and live in the today. You cannot get ahead by raising your lifestyle everytime a pay raise comes along....and frankly, if you want to really increase your salary, once you reach a certain level in the company, to get a big bucks have to change can go to your boss and say I want a raise and maybe get 5 or 10 percent or whatever but to get big dollars you have to move to another company....I'm talking raises of 30 or 40 thousand....We always figured the pay increase had to be at least 30K to even think about the move and our last one was much more than that...but we had to leave all our friends and family and move to an area that we didn't even know...Was it worth bet...we socked away all that cash and we have met many new people and seen an area of the country that we never would have....

    Bookmark   September 5, 2003 at 2:04PM
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I am different than most people. I realised that at our age, the money we have is far more important than interest we MIGHT draw by investing. My husband wanted to invest with his friends broker, when I explained the process he said put it in the bank. I have taken care of the money all of my adult life and have done a good job, mainly by staying out of debt. I advised my sis and two friends to stay our of the stock market, but none listened. One told me later "I should have listened to you". They all lost money, my sis lost $50,000. We bought an umbrella insurance policy to protect us from law suits and we have good medical.

    Bookmark   September 22, 2003 at 9:55PM
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