Tag Archives: Income

Using the “B” Word to Create Your Retirement Dream


The question at hand – Are you ready to use the “B” word?

Dreams

What is your biggest consideration when planning for your retirement?  What questions are you asking yourself? Where you will live?  Will you move to the land of the sun, be a snowbird or stay near the grandkids, family and friends? Will you travel the United States or venture out to the far corners of the globe?  Is your health good or can you get those health challenges in control, in order to open up your options?

Certainly, all of those questions need to be addressed at some point, but before answering them there is one key aspect that needs to be looked at, and that is money.  Maybe you are one of those lucky people whose retirement fund has grown exponentially or has remained stable throughout the economic fluctuations of the past decade or two. However, if you are like most Baby Boomers, your future retirement has been greatly impacted by the economic shifts and you need to reassess and reconsider what your future holds.

Humpty Dumpty

A number of years back, I moved to Peru with a dream of starting a non-profit. At that time, I considered myself pretty set for retirement.  I had worked for over a decade for a large corporation that had an excellent 401K matching program, and as a result, I had stashed away a considerable amount of money. With continued growth of that account, even after leaving the company, those funds would over time have created a very nice retirement nest egg.  Security for the future!  So, off to Peru I went, and during the time that I was in Peru – CRASH! – the market dropped dramatically, and I saw my nest egg go from ostrich to hummingbird in the blink of an eye. To make matters worse, the big bad wolf had snuck in the coup while I was gone, leaving nothing but a tiny shattered shell.

Over time, I worked to rebuild that nest egg, but without an amazing matching program and a financial market that just won’t bounce back, it became increasingly apparent that that Humpty Dumpty had fallen and even all the King’s men weren’t going to be able to put him back together again.  All that I had left was a little shattered egg, laying there in little broken pieces, unable to grow.   Time for a financial funeral, some grieving and then, as healing begins – move on.

Before the big bad wolf had its hay day with my savings, my dream for retirement was to take a trip around the world and see all the places that I hadn’t been to yet.  I wanted to have a nice, modest home and live as I always had, enjoying time with family and friends, attending a wide array of entertainment of my choosing, traveling, adventuring, just living a comfortable life.

Looking for Some Answers

It was time to begin “re-saving”, if that’s a word, and start some major problem solving! With my retirement looming only 100 months away, I started concerning myself with retirement income.  One Saturday morning I got up, made myself some coffee and turned on the computer to start figuring it out.  What were my options? I looked and searched, and looked and searched some more, until finally, with a zillion ideas circling my head, I said to myself – How can I decide what to do in the future without all the information I need? It was then I realized that I couldn’t come up with the answer until I had asked and answered all the right questions.

The “B” Word

So, I started with the basics, a budget.  Yes. There, I said it – the “B” word. Budget. I began looking with a critical eye at my day-to-day spending, down to the penny.  I use my debit card for all my daily spending, checks for some of my living expenses, and credit card only for large purchases or expenses that were emergent. Fortunately, I only had 3 accounts to look at. With a hot cup of coffee, my laptop, and Maggie Mae, my forever companion by my side, I created a spreadsheet that showed me exactly what my monthly living expenses were for the past 12 months.  Included were those expense items that fluctuated, such as gas, groceries, medical expenses etc., as well as those that were the extras, things like travel expenses, entertainment, lunches out, and coffee.  Yes, coffee.  Living in the Northwest corner of the U.S., there is a coffee culture and it sucks the money right out of your bank account.  What an eye-opening exercise this had been!  So long major Seattle coffee chain!  It has been good knowing you!

All of this information went into a spreadsheet for future reference, saved onto the computer and printed out.  Now, I have the information I need to make an informed decision!

Boone’s Farm Wine

As I looked at what my monthly resources will be in retirement, and after detailing out my present budget, and estimating my retirement income, I realized that I could stay in my house after retirement if  A) I never go anywhere, B) I never do anything, and C) I sit in the dark in the evening with a candle for light and warmth, sipping a glass of Boone’s Farm Strawberry wine.  It’s not exactly what dreams are made of. So, after a “feel sorry for myself” moment, I decided to take the bull by the horns and find a way to make it work.  As a result, I have come up with a number of exciting options and I feel optimistic for the future!

Tips

My recommendations to those readying for retirement is to first bite the bullet, sit down and looked at your budget with a fine tooth comb.  Asking the right questions and having the necessary information at your fingertips, will allow you to make informed decisions.

  • Know your current monthly expense. Create a budget based on the real numbers. Make it detailed.
  • Identify your monthly retirement income. Include the guaranteed monthly retirement income from your employer’s plan, social security income, monthly annuity payments.
  • Ask yourself – Does my projected retirement income cover my present expenses?
  • If your anticipated retirement income doesn’t meet your present expenses, then recognize that some creative thinking and problem solving is in order. How much is the gap? If you make some minor changes in lifestyle and spending, can you make it work? If not, then it’s time to regroup and look at options.  Oh, and remember to add inflation into the mix.
  • Take a deep breath and visualize a great retirement. You deserve it. Know that there are a myriad of amazing options out there for you to choose or create, regardless of your retirement income!  It’s like plucking apples off of the tree!

Have you taken the time to look at your present budget and projected retirement income?  What are some ideas that you are doing now that can help close that gap?  Share your thoughts and ideas below.