I eventually determined I would do the “logical” thing and keep on pressing forward with my chosen career path. I was 40 years old and decided I could make it to 55 years old with the same employer. Then I would use the first window for early retirement to make a change.
Here’s the rest of the story. I made it to 55 years old. That year my wife got cancer. That knocked me up alongside the head because I realized I needed to protect our health benefits by not leaving full time employment. At the time I was at the pinnacle of my career and engaged in large projects building new facilities and expanding programs. It wasn’t hard to decide to go another 5 years to age 60, which was the next good window for retirement. So a few short years later I turned 60 and I retired.
Here are a few of the downsides: Health benefits costs go up. Life insurance all but disappears. Income becomes static. Corporate contributions to your savings nest-egg stop abruptly. You lose track of which day of the week it is since you have so little to do as a regular routine. Retirement freedom is definitely an adjustment. While fun and challenging, golfing just can’t provide the fulfillment you have been used to.
The urgency to look at our future in retirement has skyrocketed due to political considerations. I will admit I am concerned now that Barrack Obama has been re-elected for another 4 year term. Our insurance costs will increase dramatically as 40,000,000 uninsured join those of us who continue to pay for our own insurance and health care. We have already started to feel the pinch as we scheduled several doctors’ appointments six months out due to overcrowding: too many patients for too few doctors in our much needed specialties; ObamaCare already discouraging new doctors from the health field.
Now the retirement upside of how you can provide security in retirement by maximizing your income capabilities so you manage to support yourself during the changing financial climate brought on by the current cultural climate in our country.
Here are the choices we have made or are considering:
1) I used every possible perk offered to encourage “early” retirement which adds several additional income streams (employer purchased annuity and otherwise) over the next 3-10 years. Most retirement programs offer these inducements since they can hire 2 or more younger workers for the cost of paying you during the latter part of your career. “New young blood” with increased enthusiasm is good for corporations. Quite frankly, I agree with that axiom.
2) We can put off taking our social security benefits till we are at least 66 or maybe even 70 so it maximizes that income stream. Some of my friends are worried about this one since they think Social Security may go bankrupt, but I really doubt that will happen.
3) We have saved vigorously for our retirement and will continue to do so for as long as possible. The nest-egg will eventually be drawn upon at the inflation proof rate of 4-5% per year in order to preserve the principle. We have chosen to use the services of a professional investment advisor to grow our savings as aggressively as we dare risk.
4) Adding additional income can be accomplished by starting a new career. I checked for job openings in our area to get some idea of what I could earn from a position I qualify for due to my education and experience. In the Boise Idaho area there are multiple openings for my particular expertise with potential income from $50,000 - $72,000. I could take on a new challenge for the next 5-10 years and save most of what I earn. Not necessary but certainly possible if I get bored with too much golf in retirement.
5) Starting my own business by using the power of cyber-resources has built residual income. I favor development of a private business plan with a product developed personally in order to have control and protect earnings. I am fortunate to have sons who own businesses doing this successfully. My own personal “brand” or product is taking root and starting to provide what I refer to as passive income, as it grows exponentially and perpetually.
6) Controlling expenses by moving to an area with a lower cost of living and good quality of life provides for continued aggressive savings. For instance, we manage with one car now rather than the tradition everyone has to have their own transportation. Our insurance is only $25 per month and gas cost between $150-200. It could be less if we didn’t live so far out in the country.
7) We buy organic food products from local farmers and have our own garden.
8) Once a week we review our finances by using a tracking program which simplifies the process. We have used Mint.com for the past 3 years and trust its security and privacy, but there are other programs out there. It tracks our budget and expenses, as well as our investments. Weekly we review each of our budget categories and ask ourselves if there is any way to reduce that expense. It gives us peace of mind to know our net-worth is still increasing on a weekly basis. One of our goals is to keep it doing so for the rest of our lives.
9) We invest in real estate by purchasing our primary residence with the intent of increasing equity. We were fortunate to do well on the sale of our home in Alaska right before the market soften a bit. Then we managed to time our purchase in Idaho right before the market firmed up and took a major growth spike to the tune of 21%. In addition we bought our new home at a discounted short-sale price. We feel very blessed by this part of our financial planning.
10) I am looking at buying a “distressed” home on a golf course when it comes up for auction in January 2013. Every time we play that course I see that beautiful home sitting vacant and think it may be a very good investment. I am in process of doing due diligence research to make sure we can either “flip” the house after some remodeling or move into it while selling our current country home. There is potential of making $50,000-100,000 if done wisely. Real estate is a tricky business but can bring huge returns.
11) And my final rule for avoiding economic disaster---“Don’t do anything stupid”. Do your homework, consult trusted experts who don’t have a financial incentive motivating their response, and move forward with confidence in yourself and the future.
Care in managing all these elements of financial security provides a much needed sense of well-being as we navigate through the longest recession in recent history. Thriving during the current national fiscal climate is not as difficult as it might seem. Everything will work out if you are cautious and wise with your resources.