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How are you preparing for retirement?

Last post Fri, Jul 26 2013 3:35 AM by joymali. 48 replies.
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  • Tue, Jun 15 2010 5:12 PM

    • smiles
    • Top 150 Contributor
    • Joined on Tue, Jun 15 2010
    • Midwest
    • Posts 312

    How are you preparing for retirement?

    Retirement for my husband and I is several years away-any advice on how we can prepare now?

  • Wed, Jun 16 2010 8:48 AM In reply to

    • Toni B.
    • Top 25 Contributor
    • Joined on Sat, Apr 5 2008
    • Seneca Falls NY
    • Posts 3,826

    Re: How are you preparing for retirement?

    Greetings & Welcome to Dollar Stretcher. Some of us are already retired and some are on the way. You might benefit from reading previous threads about the subject in one of the sub-forums such as Stages of Life & Money Management. Also - Its a great idea to sign up for the Dollar Stretcher Newsletters sent directly to your email and search around the Dollar Website for various articles. Retirement is one of those overwhelming topics and there are a lot of facets to this subject. I would also recommend that you write down all the questions you have regarding the topic so you can keep track of the information. Finally - There is a new book out - The "For Dummies" series (Black & Yellow Books) called Personal Finance for Seniors for Dummies. In spite of the the title, its offers a plethora of information regarding retirement. Hope this helps. This economy and your future retirement Last Post by MarthaMFI , Sun, Oct 18 2009 12:01 AM Is the age of retirement gone? Last Post by karenteacher , Tue, Apr 21 2009 7:27 PM Retirement Mental Preparation Last Post by Lynnea Berr , Thu, Nov 6 2008 12:08 PM
    Officially Recognized Stretchpert in Stages of Life
  • Tue, Jun 29 2010 9:59 AM In reply to

    Re: How are you preparing for retirement?

    DH & I both contribute to 401K, We both have retirement plans with our current employers. We don't expect Social Security to still be around by the time we're eligible for it.  Right now I'm trying to pay off debts with the snowball method & once that's done, put all extra income into savings. I just plan to work until I die and try to put as much money into our savings account as I can.

  • Tue, Jun 29 2010 10:58 AM In reply to

    • Pat
    • Top 10 Contributor
    • Joined on Tue, Mar 6 2007
    • Colorado
    • Posts 14,463

    Re: How are you preparing for retirement?

    One of the best things I can advise is get out  and stay out of debt. When you retire, you don't want to worry about debt payments, not even a house. Take the time to know what you want to do. Retirement isn't about stopping things, it's about starting things.

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  • Tue, Jun 29 2010 8:04 PM In reply to

    Re: How are you preparing for retirement?

    Pat:

    One of the best things I can advise is get out  and stay out of debt. When you retire, you don't want to worry about debt payments, not even a house. Take the time to know what you want to do. Retirement isn't about stopping things, it's about starting things.

     

    I agree with Pat - being out of debt is the best thing you can do to prepare for retirement.  My goal for retirement is to be completely out of debt, including my home, before I retire; it will have an incredible effect on the amount of income I need during retirement, especially with the uncertainty about retirement plans paying out.  If you can, I would also suggest diversifying your retirement income plans - so that if something happens to one, it won't be your only source of income; I have a Roth IRA, a state pension, and a 403b (I'm a teacher, so I have that instead of a 401k)

  • Tue, Jun 29 2010 8:11 PM In reply to

    Re: How are you preparing for retirement?

    Retirment whats that I still scared to death of being out on the streets being a bag lady so the only future I got is forsced medical retirement they won't let you sock away money.

  • Sun, Nov 21 2010 4:12 PM In reply to

    Re: How are you preparing for retirement?

    DH & I are 5-10 years from retirement.  Saving for our retirement is one of the only reasons I am currently working.  40-50% of my paycheck goes into a 401K at work, some goes in a Roth IRA, some to extra mortgage payments so we own the home we are in before we retire, & the rest goes into plain old savings.  I think it is important to have many "nests" for your retirement eggs, so that if one part goes under, it doesn't all disappear.

    We have always lived a thrifty lifestyle, so a part of preparation for us is getting this plot of land up to the level of preparation we were at in Idaho.  Before we retire, I want mature, bearing fruit trees & berry bushes, & a large enough garden area (with good garden soil) for us to grow most of our own food.  I have all the canning & dehydrating equpiment, & enjoy preserving our harvest, so that is a logical way for us to reduce expenses. 

    I think it is important to get any dental or surgical things done before you retire, while you still have good insurance, too.

    I have been working at decluttering the junk & finding "a place" for the things we want to keep.

  • Sat, Nov 27 2010 9:55 AM In reply to

    • OhDonna
    • Top 500 Contributor
    • Joined on Sat, Jun 19 2010
    • Posts 33

    Re: How are you preparing for retirement?

     Staying out of debt is the best answer ! Hubbys work dosent offer squat for him,,but mine does.I have a 401 type account through them,but thats it.We are in our late 40s now,,but do have plans to be debt free and working on it now.I do believe social security will be gone  by the time we reach our late 60s,which is scary.

     

    A lady I work with is retiring this December,and is very prepared for it.Another friend is planing on retiring in 6 years,,shes in her mid 50s right now.She has planned this to the point her funeral is paid for and her burial plots and headstones,all vehicles will be paid for and  will owe 2 more years on her home after she retires.

    Id like to be at that stage soon,,with funeral arrangemnts a will aand plots paid for as not to burden others.

  • Mon, Nov 29 2010 12:49 PM In reply to

    • Walt34
    • Top 75 Contributor
    • Joined on Mon, Dec 17 2007
    • WV eastern panhandle
    • Posts 1,406

    Re: How are you preparing for retirement?

    Save, save, save. Invest, invest, invest. LBYM (Live Below Your Means).

    DW and I are fortunate, I have a DB (Defined Benefit) pension with cost-of-living adjustment, but most of those went away in the 1980's and those were an artifact of the 1950's, '60's, and '70's. Long term they are simply not sustainable - if I live until my mid 70's I will collect more in pension than I ever made while working.

    But those days are gone, and people now MUST realize that they must begin saving for retirement while in their 20's or at the latest in their 30's or their retirement outlook is very bleak indeed. Unlike some I do believe that Social Security will be there in some form, but it was never intended to maintain a middle-class lifestyle and it won't. All it will do is pay for a small roof over your head and three inexpensive meals a day.

    In short, Social Security will pay for a subsistence life but that's all. If you want better than that you're on your own.

    That said, I did choose to go back to work and the bulk of that extra (i.e., unplanned-for) income is going into savings/investments although we do splurge on some luxuries now and then. If I continue to work until 65-66 I'll be able to put away more than six figures and my SS income will be 25% more than if I started SS benefits at 62. And I'm doing that not only for myself, but for DW also.

    And although having more than six figures may sound like a lot, spread over 20 years it isn't very much, a bit over $416 a month, not counting any interest/investment income from it. That's why even $2 million, at a withdrawal rate of 4% per year will only produce about $50k a year in sustainable income. To someone in their 20's that sure sounds like an unachievable goal, but paradoxically only is achievable if they start saving in their early 20's because of the magic of compounding.

    And I will admit that when I was in my 20's retirement was the last thing on my mind. I didn't wake up until my mid 30's. We know a lot of people our age group who are in for a very rude awakening when they find they want to retire and either financially cannot and will have to work for as long as they are physically able, or will have to make do with what they have, which in a few cases is a negative number. Not a good place to be in your late 50's or early 60's.

    Officially Recognized Stretchpert in Money Management
  • Tue, Nov 30 2010 3:44 PM In reply to

    Re: How are you preparing for retirement?

    Walt34:

    Unlike some I do believe that Social Security will be there in some form, but it was never intended to maintain a middle-class lifestyle and it won't. All it will do is pay for a small roof over your head and three inexpensive meals a day.

    In short, Social Security will pay for a subsistence life but that's all. If you want better than that you're on your own.

     

    I agree.  DH just increased his savings to $15%, matched at 4%, so he is saving almost 20% & I am saving 40% in pre-tax retirement savings. At this point in time, the rest of mine is post-tax savings.  As important as having the money is, I think the more important preparation is in the lifestyle - the living below your means part of the preparation. We are living on a portion of his salary, & gradually decreasing that portion to what it will be when he does retire, so there will be no abrupt changes. Once the house is paid off, we should be able to live on his projected retirement salary without too much trouble.

    Going into retirement prepared, to me, means knowing you can sleep at night in a house you own, with your basic needs & some of your wants already covered.  It means having the land we own be productive & producing foodstuffs for us to consume without being labor-intensive.  I am a real fan of fruit trees & berry bushes, because you plant, water & pick.  I enjoy gardening, but it is far more labor intensive, & as we age, I do not expect to be able to do as much physically, so we are preparing for that.

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