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Get Ready for Retirement

Updated: Oct 16

Retirement Strategy


There must be a way to be frugal and retire from the rat race and to be able to rewire yourself to follow your desires, work for yourself, give back to the community. But how? With over 30 years of investing and saving, I have a number of strategies to share below.  


The big question is 'how much do I need to retire'? It really depends two main things: how long will you live and how much you will spend, net of earnings.


There are a few basics for those not quite at retirement:

  1. Remember the value of compounding - save as much as you can as early as you can.

  2. Always spend less than you make (some of my mom's best advice)

  3. If you use credit cards, pay them off every month. No exceptions.

  4. Make sure your investments work hard for you.

  5. Put as much as you can into investments automatically each month.

In retirement, there are a number of lifestyle changes that you might be able to make, but they take more effort:

  1. Budget. We budgeted for the first several years of our marriage. We started to budget again when we retired. Determine what your expenses are - what's fixed, what's variable and adjust accordingly.

  2. Income Strategy. In conjunction with creating a budget, you will need to determine what your income will be and where your spending money will come from. When you enter retirement, your spending money will come from various sources instead of a paycheck. Part time job, social security, pension, investment income are all potential sources. More on this in the next section below.

  3. Downsize. We have lived in big houses and small houses. There are several advantages to live in a small house. It's less costly to heat and cool. Taxes are most likely less. It is easier to maintain. The catch - let's get real here - it might not be something that people will drive by and envy. Isn't that why most of us live in a big house - to show others how successful we are?

  4. Pick the best state. More on this later, but where you retire makes a big difference in cost and enjoyment

  5. Medical. This is one of the biggest expenses and you really need health insurance. Unfortunately, good insurance is expensive. Shop around. Analyze the risk of over and under insuring. Use generic prescriptions whenever possible.

  6. Walk. We all need the exercise, so walk rather than driving. It will save gas.

  7. Fewer cars. Do you need two or more cars in retirement? If not, sell one. Cut your insurance and maintenance costs in half.

  8. Keep that car. Keep that car longer. Who are you trying to impress with a new, expensive car every couple of years?

  9. Clothes. Have nice looking clothes, but don't go overboard. You are not going to the office anymore. Shop secondhand.

  10. Communication. Apparently everyone else stopped landline phone service years ago. Cut it. Shop for the mobile phone plan that you need and keep those phones longer.

  11. Travel. With visiting over 85 countries in my life, I'm all for traveling as much as possible. There are ways to see the same things everyone else does for a fraction of the costs - shop airline specials, book hotels that are safe and clean but not expensive. Why pay top dollar for a fancy reception counter and a pool. If you vacation right, you won't be spending much time at the hotel anyway.

  12. Food. Eat at home more and cut back on eating out. Drink less booze. If you smoke, stop. It's better for your heath and wallet.

  13. Shop. Shop around for the best prices. Buy what you need. Determine what is a need vs. a want.




Investing for Retirement: How to Design A Plan that Anticipates the Unexpected

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