A Comfortable Retirement Plan

Posted May 18th, 2009 by Betsy McCullen and filed in Issue 5: Future Plans

inlet-viewYears ago I thought retirement meant sitting back to enjoy the house I had lived in all my life with all the collectibles and ‘stuff’ I had acquired over the years, no mortgage payments because the house was long paid for by then and a little money stashed away for my new life of leisure. WOW! What an eye opener it has been for me!!

I think grade school should teach all students more about Managing Money and Financial Planning. In fact, it should even be more mandatory than learning history or geography, neither of which are much use when we get out into the real world!! In my earlier working years I never thought much about money. I never thought much about saving any either! I made it, I spent it…SIMPLE, right? Back then maybe it was, but I never expected money would end up driving the world the way it does! I also never expected that the cost of mortgages, taxes and living would be so expensive that I was forced to throw my money away in rent instead of buying my own home. In some areas I looked at, the taxes alone exceeded the rent I was paying!!! So, as it turned out, I was never able to save money for a house at the same time I was paying rent. On the other hand though, I will always believe I have saved myself a lot more money by renting than owning the standard, bank loanable, over-sized house with all it’s repairs, maintenance and way more room than I would ever need.

I have less than 5 years to retirement. I can honestly say that I have never been able to save money thru all my years of working. With the costs of rent, utilities, groceries, car payments and basic living expenses – all of which are necessities – I have found it virtually impossible to save anything. Then, of course, I did want a few toys so I allowed myself to get over my head with credit card debt.

As I write this, I have less than $100 in my savings account and less than $2000 in a retirement account because I got scared, took most of it out and never put any more back in. I have always lived paycheck to paycheck without much thought. Over the last few years I thought maybe I should have put more money into a retirement account or invested it…until recently when I have seen some of my friends lose everything! One friend in particular invested heavily in stocks, heavily into her 401K and thought real estate was the way to go so she bought a $300,000 home. Right now she owes about 3 times what the market value says her home is worth – she has 2 financed SUV’s – extra rooms, an attic, a basement and storage shed chuck full of clutter – credit card debt over $30,000 – and that’s just scratching the surface!! Her investments all failed when the stock market took a few bad hits and her 401K is totally gone! From the standard point of view, there is not much difference between her and I…we are about the same age, we both have good jobs, we have no savings or retirement plan and we have only a few short years before retirement age. Our BIG DIFFERENCE though is this: She is way over her head in clutter & debt while I have practically none! Just a few short years ago, I was actually jealous of her because it seemed she had it all. Now she can HAVE it all! Quite frankly, I consider her situation a huge nightmare. The sad part about it is that most people I know are in similar situations.

My real reason for writing this is because I hope I can remind others to think about retirement a lot sooner than I did. I was lucky that my job actually did that thinking for me, which saved my retirement butt!! Right now, my job is stable, thriving and has great future possibilities. I will retire with a decent government pension & Social Security (if they still have it!!), but I know the stability of the future economy holds nothing for certain. So I have worked out my plan for the next 5 years to include paying off all debts within the next year (only after months of staying focused and striving for the goal of financial freedom), building on my savings and living simply without bringing any more debt or clutter into my life.

It would take a book to talk about the process I have gone thru with paying off my bills, downsizing, uncluttering and getting to where I am right now, but I will say this: I never needed all that stuff to begin with!! Regardless of what I thought in my earlier years, I have found that it is much easier to live with less.

If there were only 3 things that I could pick out to help a person planning for retirement years, it would be these:

  1. GET OUT OF DEBT AS FAST AS YOU CAN!!! This will afford you financial freedom later on. Nothing made life more of a burden to me in the past than being so far into debt that I needed a backhoe to get out of it. By being debt free when you retire, even if you still have to pay rent, it will be far less stressful when it comes to those golden years where you are supposed to start enjoying life instead of being a slave to it. I can think of nothing more depressing than having to postpone my hard earned retirement to finish paying off a huge mortgage and/or other debts that feel so suffocating I won’t enjoy a minute of my final years.
  2. FIND A SAFE PLACE TO PUT THE MONEY YOU SAVE!!! This is best left to your own personal decision rather than anything I can provide here. I am having a hard time believing these days that my money is safe anywhere except my own pocket! There may be no interest accrued by putting my money there, but on the other hand, interest on a totally lost retirement plan or investment is a big fat zero.
  3. GET UNCLUTTERED AND STAY THAT WAY!!! If you start doing this early in your working years, you will never regret a minute of it. Debt was as much clutter in my life as the clutter itself was!! They both weighed on my mind for many years without me even being aware of it…the payments, the responsibilities, the upkeep, the repairs, the cleaning, the storage, the worries…just to name a few. They found ways to keep me from enjoying life because I was a slave to them. They were always living rent-free in my head! If you haven’t already found out from experience, being clutter (and debt) free will give you much more energy, mental freedom, personal empowerment and inspiration for life than you ever thought possible. It is quite obvious to me now that my priorities have greatly changed! No material thing I have owned in my lifetime has ever given me more personal satisfaction or happiness than being clutter & debt free. It may have given me an awful lot of moments of satisfaction, but then the maintenance, repairs and payments became such a burden that I didn’t enjoy them so much anymore.

By implementing these 3 things into your life you will find the freedoms are many. You will feel lighter, happier and less financially stressed. They will afford you more time for important things like family, friends and the stuff in life that is free will become more prevalent in your world…the smell of a rose on a spring morning, the warm sun in your window on a cold winter day, a long walk in the country…things that give REAL satisfaction instead of temporary material possessions that will soon suck you in to your next purchase. You won’t be so worried about retirement and an early retirement while you are young is a blessing in itself! Depending on the government to get you thru retirement years is getting more and more unlikely.

BOTTOM LINE: You will be amazed at how much they will change your life for the better.

8 Responses to “A Comfortable Retirement Plan”

  1. KellyNo Gravatar says:

    Great article, with common sense advice! Awesome job!

  2. MaureenNo Gravatar says:

    This article makes so much sense, and it’s too bad I did’t live my life earlier in life the way I was dreaming of – in a simple, clean, life. Like the author, I ended up having (and still do) way too much “stuff” that simply takes up space, and took away from my wallet to get. Sure its nice to look at, but then the price paid for the “stuff” may later cost me even more as I struggle to pay for food or medicine, etc. At least I never went too overboard – like the people the author knows, and as I know. Bets – way to go girl – you keep on writing and I’ll bet you wont have to worry about your financial future – PLUS live simple in heart, mind, and spirit!

  3. HeatherNo Gravatar says:

    My husband and I have talked long about how teaching this information in the early school years would save a lot of heart ache, I did get some of this training in school and at home but I know most people did not. Thank you for sharing your tips. They are good at any age!

  4. betsyNo Gravatar says:

    thanx kelly :)

  5. betsyNo Gravatar says:

    thanx mo :) we all do what we think is right for us at the time…it’s never too late to change your mind. btw, once i make all that money you think i’m gonna make, we’ll head to alaska for some kayaking – on ME of course :) :)

  6. betsyNo Gravatar says:

    thanx heather :) the earlier the better…before we start those bad spending habits!!

  7. ErinNo Gravatar says:

    Thanks for this article Betsy! I wish I had started earlier but I’m so thankful I’ve started adopted these practices while I still have time. And thank you for reminding me why this way of life is so important! I’m 35 years old and will FINALLY be debt free from all my credit cards and my car next month!

    That just leaves the home I purchased this year. It’s not tiny, I didn’t become aware of the tiny homes until a couple weeks ago, but it’s small by comparison of the norm these days (920 sq ft). Most people thought I was crazy going that ‘small’, but I guess my mind was already heading in the direction of the small home movement and I didn’t realize it. It just makes sense to me!! Now I’m thinking, when my daughter is raised, I might just have to go tiny!! :-)

  8. Betsy McCullenNo Gravatar says:

    you really inspired me with this post erin! i too didn’t know about the tiny house movement until early last year. i surely wish i had known all this when i was 35! i would have retired years ago!! i just turned 58 and have a little less than 4 years left before i can retire. it makes me tired just thinking about it – LOL!! i am a firm believer that a small house will always keep us pretty debt & clutter free :) if we don’t have the space to put stuff, we won’t spend much $$.

    congrats on your being that close to debt-free. you should celebrate :) :)

    best of luck in all your future endeavors and i hope you will one day have your tiny house.