Tom Young

Using this long (book length) review, written in 2012 for a different website. Don't bother to read it... Too long, irrelevant... Serves to keep me in touch with thinkgs I've forgotten. Currently in stage 4 of Alzheimer's... Looking forward to finding new friends, and to what looks to be the kind of forum that I'll enjoy. Many interests and enjoy thinking outside the box.
Regards,
bob
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Having kept some notes on our retirement, I am thinking to share them here as an overview of the ways my bride and I managed to stay out of the working world since 1989. We live simply, with no travel, and apart from any expensive social life, though our life in retirement communities FL and IL, is very social.
#1'
Everyone has different ideas on what retirement should be. One size does not fit all.I have some thoughts and experiences to share, not as recommendations, but just as food for thought.
First, we've been retired for almost 23 years, so a lot of our experience will not be the same as yours.
With no pension (assets from pension plan were used for starting a small business... no net gain or loss) retirement started out as "give it a try"... if it doesn't work out, go back to work... Retirement prompted by a cancer scare.
Age 53 to age 65 was tough from the health insurance angle... Even then, before medicare kicked in @ age 65, we paid about $11,000/yr... BTW... medicare is not free... we still pay about $8,000/yr (2 persons) for medicare and supplement, and another thousand for basic Pharma.
Social Security... Important to check with SS for your expected benefits. Just a phone call or visit to SS office. Has to do with how much you put in... Husband and wife... Higher income sets base SS for couple... If the smaller payout is less than 1/2 of the larger, that spouse gets 1/2. If the second income is over 1/2 of the larger, then that amount is paid. In my case, even though my wife worked, her calculated SS would have been less tha 1/2, so she gets 1/2 of my payment. (Even if she had never worked, she would still get 1/2 of my SS. It's just the way the rules are written.)
In my case, I had always maxed the pay in. We took SS at age 62 so it was a reduced amount. We began receiving checks in 1999, and currently receive (2 of us)(with cumulative COLA's) a total of nearly $23,000/yr. $15K for me, $7500 for my bride. That was the max at that time... it's higher now of course.
At the time we decided to retire, we had a detailed plan... a budget... income and outgo... and looking back 22 years, despite huge variances from our initial plan, we are almost exactly on the budget.
There are hundreds of financial planners on line where you put in your estimates of assets, and return and inflation, and come up with the amount you need to retire. In our case it doesn't work... All of the planners make the assumption that you will want to maintain your asset capital until you die... In our case, had we followed their plan, we NEVER would have retired.
We just decided to die at age 85... dead broke. Made our planning much easier. Personal decision of course, but if you plan to spend down capital assets, it makes planning easier.
Our plan is extremely simple... On the spending side, we have three different budgets that we can adjust as circumstances warrant. Best case... Nominal... and Austerity.
On the Asset/Nest Egg side, We boil our assets down into three categories.
1. Fixed assets... house, auto, and other valuable non cash items... real property, jewelry, . We do not count household goods... (experience tells us that this is not realistic)
2. Non Income producing assets... bank accounts, cash, cash value life insurance policies.
3. Income producing assets... stocks, bonds, annuity.
All of these items are kept on a spread sheet and periodically updated. It's easy to come up with a total value... and then to average the income from the total...
To calculate where we stand in our retirement plan, we add
a. Social security amount.
b. Amount of interest earned on income producing assets.
c. ... and add the Total Assets divided by the number of years between now and age 85.
That establishes how much we can spend, which we then adjust to our best/nominal/austerity budget.
Sounds funky, but it works,and it takes about 2 minutes to tell if we're on budget or not.
The second part of this budgeting thing, is that we've been blessed by not having any debt. All of this makes for very simple accounting. One more thing... we don't try to calculate for inflation. In fact, it has not been a problem over the past 20 years.
#2.
When we first retired, we thought to use a financial planner, and had him draw up a plan. His calculations had us "short" in capital to the tune of about$200,000... which would tell us we had to work for another 10 years. We spent a month or so agonizing over this, before deciding to give it a try anyway. Best decision ever... We're ahead of his plan too.
Another time, I hope to get in to some specifics that we've discovered that have allowed us to stay ahead of the game... like starting off with very affordable housing... buying the right cars... older deluxe with low mileage ... food savings, drug price savings... taking advantage of state plans for seniors that few even know about... keeping entertainment costs very low... planning for nursing home... advantages of owning a house, insurance savings, medical and dental and optical savings... tax advantages.
All in all, I believe that retirement may be more affordable than you may think.
On "SIMPLIFY"Our own simplification is not in throwing things out... egad... I'm a hoarder, but under control. I keep "Stuff" that I may need for repairs, for replacement... Like all kinds of paint, wood pieces, computer parts, plumbing stuff and like that.
Our simplification is in our lifestyle. First, our house(s) inside... spartan... easy to clean less to walk around. Outside, very unfancy... perennials... very limited Halloween/Christmas/Seasonal flowers, and other decor.
The more important simplifiction part of our lifestyle is in intrapersonal relationships. Having lived in some 22 different houses and locales since our marriage, we realized early on, that "staying in touch" with neighbors and friends was an impossibility, so we don't spend a lot of time with phone calls, emails and things like "get togethers" and Christmas cards. 25 years ago, we came to a mutual agreement with our kids, all boys, not to spend time in each others' lives. We have a great relationship that is always upbeat, and happy. We don't exchange cards or gifts... not because we don't care, but it's just so much simpler.
I realize that much of what we do is different, and many of our friends don't agree with our laissez faire approach, but it's like "different strokes"... and it works for us.
In the Winter months, we live in a very active manufactured home, Senior (over 55) Park (Community) of 350 homes in Florida.. There are dozens and dozens of activities going on all the time. The best part of this, is that it provides all of the entertainment we could possibly handle... and yet we can pick and choose, without having to make commitments. Out time is our own... We are free to do what we want, and when we want, and we are extremely protective of that freedom.
In the early years 1991 through 2002, we still had commitments, like bowling or shuffleboard, and I taught computer classes. We volunteered in short term projects... building fixing repairing and organizing and running major parties for the community... pot lucks, and car caravans to Daytona Beach... and other Florida beaches. Since then, we pick and choose.
Now... (except for my bride's bridge games) we come and go with the wind... Having a large, heated, community swimming pool and hot tub is great!
Entertainment is basically free... Even our parties... with endless beer, wine and incredible food... along with great local band entertainment for dancing... cost between $10 and $15/couple... (used to be $4 to $6 couple), but you know... inflation. In the winter, there is a party almost every week. "Economies of scale".
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I'm backing up a bit to tell you how we started out in the early days. We had lived in the Chicago Suburbs, Next to Naperville... an upscale town... high prices, taxes, traffic congestion, and one of the highest average (non California) incomes in the nation. We knew we wouldn't afford to stay there... so made our choice... to Really downsize...
We bought into a campground (the nations largest family campground) where you own your land... but can only live there for a maximum of 185 days/year. We bought a beautiful spot on a small lake. It's a "Park Model"... (look that up, if you don't know what it means) it's just a permanent type camper, similar to a standard manufactured home, but just 12 feet wide and 34 feet long. (400 square feet)... add a 400 sq foot add a room and a 400 sq. ft deck...
Now here's where the savings come in... even today, you can buy a used unit similar to mine for as little as $15 to $20 thousand dollars, including the land. (We paid somewhat more, because of the lake setting). The really nice part is the cost of staying there... Campground annual dues $1100... including use of all facilities... um-metered water and sewer. Taxes $500, insurance $500... All inground utilities. Total annual "resort" costs = about $2400.
"Woodhaven Lakes" Amazing place... quiet as the moon... despite the 6500 sites. 43 miles of roads, 18 miles of wooded trails, two Olympic sized pools, dozens of playgrounds, 10 tennis courts, 16 "comfort stations" (large bathroom/shower buildings)... a very large campground store... 7000 sq ft. ...our own Tru Value Hardware and lumber store, our own gas station, propane station, and a full service bank... A fully gated community with a 24 hr. security staff of 25 -35 people, 7 small lakes, a fishing sporting goods store, two restaurants, a nature center, three craft and meeting centers, two large outdoor pavilions, two senior centers, seven computer "hot spots", canoe rentals, a large sand beach... and a fully staffed activities department... Snow mobile trails, Sledding hills ice rinks (in winter)... and the whole campground is nestled in a climax black oak forest... trees, fields, wetlands and almost every temperate zone animal, bird, and plant. To us it's Shangri-la... it's a working man's park... which means that on any given day less than 10% to 20% of the units are occupied. It's a weekend/week off type of vacation retreat, with perhaps 200 snowbird seniors, who live there for 1/2 the year.
BTW... all of this in a township with a population of 204 people.The website has more details, with real estate info.It's something to consider for anyone on a limited budget. This type of community (though perhaps not so large)... exists in many other states... The Tip of Texas, and Arizona come to mind, as many of our friends do the 50/50 annual winter/summer move.
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An interesting side note, I think, is that in both our North and South communities, many of our neighbors and friends supplement their income by working for the community, or in doing odd jobs... lawn mowing, lawncare, sewing, home healthcare, carpet cleaning and housekeeping. it's a symbiotic relationship. We also trade services.
We have since bought a permanent home in a continuous care full service retirement community with single family homes, a 60 apartment house, an assisted living and rehab center, and a full service nursing home and Alzheimer unit. that is another part of our retirement story... to save for another time...