Observations on life

You can’t retire without a plan

I have been retired for eight years and I’m starting to feel the impact of inflation. Make no mistake, I am not your typical retiree and that’s what scares me.

I have a very good pension, Social Security, a robust 401k; other investments and no debts. So if I’m starting to feel it, what about the more average retiree? It’s all relative of course, but there are many expenses one must cope with that are not income related.

Having been a benefits manager and then VP Compensation and Benefits for a large corporation, I have no excuse if I didn’t have a plan. I tried to impart the need for a plan to thousands of employees over nearly fifty years; sometimes it helped; sometimes it didn’t. Sometimes it was too tempting to borrow from the 401k or to take a big chunk out and buy that big something you always wanted.

The great majority of Americans face retirement without a traditional pension (excluding government workers of course).

To have a plan to take them through retirement most people need to make choices, if not sacrifices, during their working years. Many do not have the foresight to do that and thus savings (and that plan) suffer.

Do you have a plan? A plan you will stick to through retirement.

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7 replies »

  1. When I was 20 years old and thinking about military service, I talked with people in their 40s.
    All of them that had served one enlistment said they wished they had stayed 20 or more years for the retirement check. So, I did my 20 years and left the USAF in 1995. Since then I have collected over $320,000 in retirement benefits, more than I made while on active duty.
    I start my SS at 62 in March and will see a 66% increase in monthly income. I live in MT on a rented lot in a paid for mobile home, Monthly bills – Lot rent $363 includes water and trash. Electric bill $50, Nat. gas bill $60, Phone and internet $36, car and home insurance $153, Life insurance $145 total $807 per month. property tax $100 per year, State income tax bill $126 per year. Monthly income in March $2,962, with COLAs. I paid cash for a 2006 VW Jetta in Jan 2017 and in MT if your car is over 10 years old you can buy a permanent tag $220. It will be years before I see any major inflation impacting my standard of living. With planning I quit working in 2006 and travel several months each year to visit family and friends in CA, OK, TX, VA, NC, PA, GA and FL. The future looks bright. No keeping up with the Jones here, the last new car I purchased was in 1981.

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    • Sounds like you have planned well. When I was in my 20s I lived in a mobile home here in Texas. It was a nicer/better alternative to living in an apartment. But I would have thought MT would be too cold for mobile homes. That is, it would be expensive to heat them in winter. Here the bigger expensive is staying cool in the summer heat.

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      • Winter is not that much of a problem, now that Natural Gas is really cheap and insulation has been added to the outside walls. NG bill in winter 60 to 70 dollars, when heat is not on NG bill is 30 to 40 dollars, for gas water heater, clothes dryer and kitchen stove. I will not be spending much time in MT during winter, now that I will have extra SS income. I will be going south for the winter and might even buy a winter home in OK, where my son lives.

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  2. In what way are you now feeling inflation ?

    I have felt it via increases in home and car insurance. Of course, insurance premiums go up for other reasons and have gone up even during the deflationary economy. The value of my home has greatly increased and so have my property taxes. Fortunately, I just turned 65 and now able to take the over age 65 deduction. The cost of professional home repair has also gone up.

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    • Sounds like you have planned well. When I was in my 20s I lived in a mobile home here in Texas. It was a nicer/better alternative to living in an apartment. But I would have thought MT would be too cold for mobile homes. That is, it would be expensive to heat them in winter. Here the bigger expensive is staying cool in the summer heat.

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  3. I’m retired 17 years and luckily I have a pension, a 401K, my thrift program and some utility stocks that pay dividends and medical coverage. When I retired I attended a financial program given by my company. One comment I’ll always remember was “don’t rely on 10% returns on your CD’s be more conservative figure 8%” Well I sold my principal home and put that money in to ladder cd’s first at 10% getting over $40,000 a year, with my pension and SS I was living like a king. Then the new administration came in and 10% became 1%. Cut back on trips, cars and new toys hoping things would change. At a dinner recently a friend made the comment that “I’m glad the interest rates are low so the country can borrow money from China at low rates” One of the few times I have lost my temper.

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