4 Crucial Retirement Tips

Even the best laid plans can be fouled by government miscalculations and other global calamities. We tried to retire in 2009, but our investment savings took such a hit, we had to stay and recoup some of our losses. 

If you retire early, expect to pay some heavy premiums for private health insurance.

Tip #1 

Keep working until 65 unless you can afford the wide swings in insurance. From what I hear, the swings are less volatile now, but it's still something you should keep in the back of your mind. Until Medicare kicks in, costs for private health insurance is scary-high.

To be safe, we budgeted for twice the amount we were paying while employed. That lasted maybe two months. Because of Obamacare, our private insurance went up four times in the first year alone.

It was a terrible burden until we reached Medicare age.

Tip #2

Know your budget. If you have a spouse, make sure both of you know where the money is going and why.

Because we'd never lived off our savings before, we were very, very careful with our spending in the early years. 

It turned out we were so good at holding down our expenses, our investment manager congratulated us and wished all his clients were this aware of their finances. 

He told us he has a few clients he's had to remind to rein in their spending. Strangely enough, most of the big spenders are widows. I wonder if it was because their husbands handled the money.

Tip #3

Never retire if you still have debt. It will haunt you. Pay it all off first or keep working until it's off the books.

The most important thing we did before we stopped working was to pay off all debts and be proactive with expensive repairs, such as HVAC units, major appliances, and cars.

We did a complete assessment on what was giving us trouble and how much it would cost to replace or repair. We took care of it before we retired.

Tip #4

Plan a home for now and the future. This includes things like safety handholds in the shower, wide corridors for a possible wheelchair, and an easy to clean house. Rugs are pretty, but they're trip hazards. 

And do yourself a favor. If you're retiring, opt for a one story house. You might be able to run up and down stairs now, but that might not always be the case.

Before we retired, we spent an entire year house hunting. There were a lot of beautiful properties, but this was going to be our last home and we wanted it to grow with us. This has a lot to do with lifestyle. If you're not particularly handy and prefer to travel, you'll want an apartment or some maintenance free condo.

If you're like us and get a kick out of being self sufficient, you'll want land. 

Right now I have a niece who's land hunting. She's young and she's got another 30 years to grow a homestead into her vision. I envy her. I remember those days. They were the hardest, yet the most fulfilling years of my life. I learned so much.

The trick about land is that you want just enough. You have to think of what you can manage once your mobility becomes limited.

Six acres was enough for us. There are enough woods that we don't see our neighbors and enough open space for gardens and animals.

We've got it nearly maintenance free. We're still having trouble keeping weeds at bay, but that's the extent of our workload. If it ever reaches a point that we need serious weed intervention, we can hire someone or consider downsizing.

Finally, remember that retirement is a lifestyle change. It feels kind of awkward in the beginning, but after a while it becomes a life you love without all the stressors of your work life.

Start early, and as early as possible. I know how hard it is to save money when you're starting out or starting over, but the sacrifices you make now will reap huge rewards without the worry of debt.

That's the whole idea. You want to retire with peace of mind. You don't want to have to work another job just to make ends meet. If you take on a "retirement job", let it be one you do because you enjoy it.

I belong to a Frugal Group on Facebook. Many people in their 30s and 40s see retirement as a pipe dream. I did too back when I was that age. It seems unreachable when there's so much that takes your money, but it's doable. 

There's an ideological debate right now among the younger generation where they balk at making sacrifices now just to have a few years of freedom at the end of their lives.

I understand. But speaking as someone who's closer to sunset, I can tell you, it was worth it. We are enjoying our lives. Even though our joints hurt and our concentration isn't what it used to be, we're glad we're not having to suffer at a dull job because we didn't plan ahead.

Don't give up the dream. It is so worth it.

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