Financial Worries In Retirement
…or the elephant in the room – to some, is the financial worry. Do you really think you have enough money put away to afford to retire? That was one of Dick’s and my first dragons to tackle.
Now, if you’re soon going to hit that magic age, it may seem a bit late to worry about. But, hopefully, you’ve learned to be a bit frugal along the way – put a little bit away – learned not even to try to keep up with the Joneses! Remember the the pitiful guy on the television commercial who shows off his beautiful house, his big new car, the golf club membership and then admits “I’m up to my eyeballs in debt!” – poor guy – no – poor stupid guy! Dick and I learned years ago it’s not how much money you bring in, it’s how wise you are using whatever that amount is. Don’t even attempt to keep up with the Joneses! So, clear up those credit card balances before you are ready to retire and then make it a practice to always pay your credit card off each month.
We also feel you should try your very best to have your home paid off – no mortgage in other words. Remember, you’ll most likely want to downsize – why worry about having to clean and care for a 4-bedroom home when you really just want to go get another round of golf in or take another day-trip? Hopefully you can sell that big money-drainer and get something easy to take care of and put a good chunk of cash in your pocket!
And have your car paid off. All reports tell you how much money is wasted when you buy a new car as opposed to buying one a couple of years old. I just read that when you drive a new car off the lot, it looses around 23% of its value! That’s terrible! Buy second hand and put that savings in your own pocket. But, I have to confess, Dick and I just bought a new car a couple of months ago – 0% interest and a great price – low, low monthly payments (we put a big chunk down)…then came home and wondered why we even did that, with the 0% interest…oh well – what’s done is done. Oh – our car that we were driving turned over more than 150,000 miles and was a great car – really did still look like it just came off the showroom floor! Hope we have that success with the new one!
On the car issue – you most likely will easily be able to do with only one car during retirement. Now, don’t do this immediately! Living with only one car in the family may take some getting used to. Try using just one car for a month – see if you can manage. Wouldn’t you rather spend that insurance and upkeep money on another little side trip? Try it – you may like it. You’ll learn to schedule your comings and goings! And remember, it’s not just a car payment you’ll save – it’s insurance, and all the upkeep. If you’re lucky enough to live in a retirement community, you’ll probably want to get a golf cart for getting around. They’re fun and oh so economical! And don’t forget the wonderful exercise you’ll get with a bicycle or just walking!
Of course, it is great … …if you have a decent amount of savings put back to supplement your Social Security. A lot of people will receive pensions from the companies they worked for, but there are also a lot of people who don’t have a pension coming in …we’re in that group. We always knew our retirement would be what we were able to put away. And then, there are lots of people who make it, living only on their Social Security.
In my book, Retire In Luxury, you’ll find a chart comparing living expenses where we lived compared to expenses we could expect in Mexico; you’ll understand just why people are heading to Mexico. Here’s a basic expense chart below.
Actually, during the time Dick and I were exploring and researching in order to decide where we would spend these precious years, we had charts for everything. We even had a chart about what we wanted in a house – what would be really important to us, what was necessary, and what we’d like but could do without. In maybe respects we really are detail folks, I guess… works for us.
feel free to copy it and fill in the blanks with you own specific info – it’s a good way to start with your present expenses:
Life Insurance, Dick
Life Insurance, Barb
Health Insurance, Dick
Health Insurance, Barb
Medical Evac Insurance (Mexico)
As you see, I didn’t list Car Payment nor House Payment. I’m sure everyone’s list will vary, but this is a pretty good one to use as a base – it’s a good way to get started.
Addition Feb 3, 2013 – the amount you need to move to Mexico has changed – see – http://consulmex.sre.gob.mx/detroit/index.php/info-english
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Barbie Parks is the publisher and editor of MoneySavingMexico.com. She is the author of Retire In Luxury: How To Retire Abroad And Live Better on Less and her latest book, Money Saving Mexico: How To Save Money On Everything South of the Border.