Making Retirement Work

We've noted that most Americans are not prepared for retirement (a couple times) and that most are in bad financial shape overall. Given these, many people will be looking for creative ways to make retirement a reality.

CNN Money offers some tips to making retirement work in a slide show. I've pulled out the key thoughts and summarized them below:

• Save big with a smaller house


• Cut back on expenses -- take vacations every two years instead of annually, cut out expenses like cable TV, go without a car


• More time translates to more savings (have more time to pursue saving ideas)


• Eliminate debt


• Get a part-time job


• Wait to retire


• Start your own business


• Relocate

So the ideas boil down to: 1) increasing income, 2) eliminating expenses, and 3) taking a bit more time before you retire (saving longer.) Sounds like the right list to me.

Here's what I think I'll do with each of these:

• I think down-sizing our home will be something we do sometime in retirement -- for the sake of "less house to take care of" as much as reducing expenses.


• We already manage our costs pretty closely, only spending about a third of our income on living expenses.


• We will probably pursue additional cost-savings opportunities once we have more time. An example: I'll do more of our own home repairs.


• We haven't had any debt for a long, long time, and don't plan on adding any anytime soon.


• As I've said previously, I think I will work part-time during retirement. It will keep some money flowing in as well as keep me active and "in the game".


• If anything, I'd like to retire early -- or at least take early semi-retirement.


• Perhaps I'll keep running FMF during retirement and turn it into a business. Anyone willing to read that long? ;-)


• I'm not sure where we'll end up living, but relocating is a good way to cut down on costs -- especially if you live in an expensive market. And if you REALLY wanted to cut costs, you could always retire overseas.

Anyone planning to use any of these ideas as part of their retirement strategy?

Comments

[Norman]

I'm a 53 year old baby boomer. I decided this year to downsize my abode by selling my house and paying cash for a condo. Retirement planning, even though its a few years down the road. I figured, why wait to have less to maintain, why not now, while I'm working and don't have enough time as it is. Besides, I keep thinking that by the time I retire, there's going to be a whole lot of baby boomers trying to downsize all at the same time making big houses less valuable. I already live in one of the most inexpensive areas of the country, so I'm covered on that point.

[Matt]

1) I have the proper size house to retire in but I would like to move to a cheaper location.

2) I am planning on vacations ( and I am mean contributing to a fund right now for that) when I am still mobile and able to. When money is lower and I am not able to move as quickly then I will slow down and vacation less frequently.

3) Couponing and deal searching will definetly be in the mix

4) Within the next months free of the mortgage.

The others are a toss up.

[Old Limey]

I am 77 and retired at 58 in the custom home we bought when I was 44.
We decided not to move when we retired for these reasons.
1) We love the home, its location, & the garden into which I have poured lots of hard work and money.
2) Under California's Prop 13 our property taxes stay very low.
3) The home was paid off and had appreciated greatly when we retired. Why pay a boatload of income tax?
4) As an ex engineer I know all the ins and outs of the home & yard and can fix anything that needs fixing.
5) I love gardening, and we like having 4 br, 3ba, and 2,600 sf on 1/3 acre even though there's just two of us.
6) We're in an exclusive location in Silicon Valley, close to everything, with a fantastic year round climate.

Our conclusion - Money wasn't an issue and there was nowhere we liked better than right where we were.

[Cherleen @ My Personal Finance Journey]

Why wait until you retire to start with your business? Why not do it now when you still can so that you will not get into another risk when you retire. You only need to maintain it when retirement comes.

[billyjobob]

I'm pretty good on all these. I have a small house. No debt. Live a frugal life style.
I don't get the " work part time or start a business when you retire". To me thats not being retired Thats working at your own business or working part time. Its not retirement. It's a change from your present job situation, but its still working.

[Rich]

FMF,

I'll keep reading Free Money Finance until you stop writing!

I'm 41 and don't think I'll ever be "retired." I like to think of retirement as a time to refocus and refine our lives. I plan to keep on doing what I love, though the location and hours may change.