s/o: How to retire financially secure?

[FaithManor]

I think Amyg hit the nail on the head. Your options are far better when you are a decent human being that other humans enjoy being with than the kind of self centered, woe as me, I shouldn't have to, kind of person that no one can live with or imagine helping.

 

And no amount of money in the world is worth being totally alone.

[SKL]

I agree.  Back when I had serious money woes, I used to invest a lot in relationships, helping people non-monetarily, and I would think, at least there are several people who would let me live in their basement if it came to that.  :P  Of course now that I have kids, all bets are off.  :P

 

My kids say they would like to continue to live with me long after they are 18.  I say, you may change your mind, but if you still want that, it's fine with me.  As long as you don't become impossible to live with.  :P  We recently added a couple of rooms so we are not cramped, so why not?

 

I too have always shared a home.  People say they could not do that, but they would have a lot more options if they could.  Sharing living spaces is the main reason I have savings to help my kids with college.  It's the main reason I can give my kids some advantages without worrying about money.  It also means that when the kids do move out, I won't be lonely, at least as long as the other people here are alive.  And then maybe a kid or grandkid or other relative will move in.  I'm certainly open to it, and I think it would probably be a blessing.

 

I've thought about moving to a smaller assisted-living type home in my declining years.  I used to think no, I have too much stuff that I don't want to part with.  But now I'm not attached to "stuff" any more.  Being with people is more important.  Whether it will make financial sense is a different question, but I would not be opposed to the idea per se.

[HS Mom in NC]

30 year mortgages are a big mistake most people make.  If you get the 15 year mortgage and you're careful to keep your housing expenses at 25% of your take home pay maximum, you're going to be on much more solid financial footing. Thinking they can afford more house (more square footage, more price tag, more years of interest) than they really can is one of the most common financial mistakes.

Investing in lifestyle choices with a steady diet of highly nutritious food, daily exercise and avoiding excessive drinking, tobacco use, sugary and salty foods cuts back on earlier onset medical problems that snowball as they progress.

Maintaining quality relationships and interactions that serve people are the ones that keep people doing well emotionally and mentally as they age.

[Χά�ων]

We live well below our means, bike when/if we can, have one car if/when we can, the basic stuff. A lot of frugal living or money-saving blogs focus on the teeny, tiny things you can do to save $20 a year. I love MMM b/c he's focusing on the huge, monstrous money vacuums of daily life that we often discount like 3,500 sq. ft. house for 4 we don't need or gas-guzzling massive truck to drive 2 miles to work. Dh gets paid a lot more than we need, which we are very blessed by. We sack that cash away in Vanguard accounts, stocks, maxing out retirement funds for the year. Also, building back up the Emergency Fund (more like Moving Fund in the past decade) if it's been depleted (like when we moved here and had to pay out of the wazoo for stuff until we got reimbursed)

 

A lot of it is making wise decisions that aren't necessarily just with the here and now in mind. No big purchases made spontaneously. We usually only vacation when tacking it on to Dh's work travel (like to Hawaii). That way his plane ticket (ours with credit card $$ rewards), hotel, rental car and food is paid for. We vacation a lot like this for maybe $100 max. for activities and museums done there.

 

So nothing mind-blowing. There really is no secret to the method by which it's done, IMO.

I love frugal living blogs, would you please link to some of your favorites?

[creekland]

Well, because we were good little savers and have saved and saved, we are much better off than most people.

 

However, none of the promises of "and then through the magic of compounded interest you'll have a million dollars or so by retirement" have come even close to coming true.  We've been sold a bill of goods.

 

To be totally honest, the vast amount of our good years and retirement income has come through real estate investing.  We live off hubby's salary (and use my pitiful one for extras) most of the time.  Then, when we got enough, we started investing and leveraging debt (mortgage debt) to keep investing.  It worked very, very well, BUT we've also had some major losses (esp during the economic downturn and with a few mistakes) AND it makes a huge difference in where one is located, so I'm not advocating that for all.  It also helps that hubby can fix almost anything and can barter some other jobs when they are needed.

 

If we had just put our money in "basic" stocks or whatever, we'd be nowhere near at the level we're at now.  The rate of income (unless one is lucky choosing stock) is just not the same.

 

30 year mortgages are a big mistake most people make.  If you get the 15 year mortgage and you're careful to keep your housing expenses at 25% of your take home pay maximum, you're going to be on much more solid financial footing. Thinking they can afford more house (more square footage, more price tag, more years of interest) than they really can is one of the most common financial mistakes.

 

Investing in lifestyle choices with a steady diet of highly nutritious food, daily exercise and avoiding excessive drinking, tobacco use, sugary and salty foods cuts back on earlier onset medical problems that snowball as they progress.

 

Maintaining quality relationships and interactions that serve people are the ones that keep people doing well emotionally and mentally as they age.

 

30 year mortgages are the best for leveraging debt IME.

 

Regarding the bolded... it's not always true.  If I compare my diet and lifestyle to other very close genetically related family members... well, it annoys me like crazy to think about it.  Guess who got the medical issues? It sure wasn't healthier eating or exercise or avoiding drinking, etc, that helped.  One could argue the opposite based upon my family.  And those issues continue to progress (and are bugging me quite a bit right now making me cranky on top of it all, so beware of that when reading this).

 

I agree totally with your last statement.  I was training another calendar year of students in classes this week (9th graders)... and am already receiving the benefits from those started good relationships - very beneficial on an otherwise not-so-great day with other issues.

[waa510]

I love frugal living blogs, would you please link to some of your favorites?

 

 

I enjoy blog posts by people who follow MMM because it's easiest for us to implement (it's a method we mostly understand and have started doing already). YMMV though. These should pull up when googled

 

I like Go Curry Cracker, Making Sense of Cents, Monetary Musings, and Early Retirement Extreme if you want to go...extreme...

 

I also find a lot of inspiration and support from the MMM forums. 

 

:)

[Tita Gidge]

To be totally honest, the vast amount of our good years and retirement income has come through real estate investing.  We live off hubby's salary (and use my pitiful one for extras) most of the time.  Then, when we got enough, we started investing and leveraging debt (mortgage debt) to keep investing.  It worked very, very well, BUT we've also had some major losses (esp during the economic downturn and with a few mistakes) AND it makes a huge difference in where one is located, so I'm not advocating that for all.  It also helps that hubby can fix almost anything and can barter some other jobs when they are needed.

 

 

30 year mortgages are the best for leveraging debt IME.

 

 

Yes, I agree!

 

I understand the desire to have a paid off home, and I think it's the right answer in some situations. But I don't think it's the smartest move for everyone. Not only does a longer mortgage allow for better leveraging of debt, but it's also made more sense for us when it comes to taxes. A lot of it has to do with timing and knowledge of the market, but of course there's always an element of good fortune involved!

 

Our life insurance will more than cover the cost of any remaining mortgage, ensuring none of our descendants are left holding it.

[Tita Gidge]

Maintaining quality relationships and interactions that serve people are the ones that keep people doing well emotionally and mentally as they age.

 

This is so important and vastly underestimated!  I agree with your insight completely.

 

My grandmother and four of her siblings are in their 90s, all living at home with regular and active lives.  They walk to church every morning at 6am, drive to brunch with "the kids" (church friends in their 60s-70s), and three days a week are volunteering at the local food pantry. They have another sibling who is 103 and living overseas, who still grows her own food.  Their other siblings all lived to see their 90s, excepting one who died in an accident in her 40s.

 

I credit a lot of this to their diet, which is a traditional Asian diet, and to their habit of walking daily.  But most of all I credit it to the level of involvement they've always maintained with the family and within social groups.  It goes a long way!  (It certainly motivates me to be a nicer, kinder person than my nature makes me to be.)

[Dad 4 Boys]

We also tack vacations on to Dh's work trips. I'm taking the younger girls to Amsterdam with us in May. I'm sad we are gong to miss the trip to Vancouver next month.

 

We pay for our plane tickets with points. The company picks up the hotel and there are vendors who want to take us out to eat for every meal. My favorite part though is that it doesn't use up any of Dh's vacation time. We have the opportunity to take 3 or 4 of these "vacations" each year.

 

We have been consistent in contributing to our 401k. The company matches up to 8%. They also provide a pension, retiree medical and post employment life insurance.

 

I agree with other people though that luck is still a factor in how we will fare. So that leads me to the most important advice I have. Don't act like an ass.

 

If disaster were to strike and I was destitute, I would have options of kids and friends and relatives to share expenses and resources with because I have consistently shown them that I can be a team player and contribute without controling and above all else, treat everyone with respect even when I don't agree with/understand their reasonings.

 

I have relatives who will die alone because no one who knows them would live with them by choice.

 

So my advice is, don't be that person.

 

I have what I consider to be decent benefits, but they are nowhere near what your husband gets.  I would say that those benefits have to be in the top single digit percentage of what's generally offered today.  You should count yourself blessed.  Retiree medical is huge in this day and age.  I have two partial pensions from previous owners of the plant where I work, but was never even close to qualifying for retiree medical.

 

I'm 51 and have contributed steadily to my 401k/IRA since my late 20s.  When I think about retiring, healthcare is the big question, especially if I tried to do it at 59-1/2.  It would most likely not be retirement, but a scale back to something else I would want to do other than my primary career. 

[kubiac]

I love frugal living blogs, would you please link to some of your favorites?

 

http://theprudenthomemaker.com/blog?view=entry&id=88

 

http://dontwastethecrumbs.com/

[FaithManor]

Gotcha. That makes sense. I think the general rule of thumb to recoup money spent in buying a house is 7 years, so I agree with you if in your area 10 years is the norm.

 

I assume the property taxes are going up quickly because the cities are losing people while having to maintain the same infrastructure levels. Is that the case?

Oh yes. They need tax revenue and have to get it from fewer and fewer people and businesses. In our county they keep raising property taxes, passing millages to repair this or that, but in all actuality despite the higher taxes revenues keep going down. Of course the net effect is that people are tired of ever increasing taxes while wages remain low and stagnant with the only job growth experienced on this side of the state is part-time, minimum wage no benefit jobs. Which causes people to look for work elsewhere and often the elsewhere is east coast, west coast, or southwest. If my kids find employment on either of the coasts, having seen what the cost of home ownership is in the coast regions, my guess is they will never own a house unless they manage a job in the southwest. Dd and hubby live in Albany. They look at their income in relation to what modest homes are selling for plus taxes and insurance, and if he gets a modest raise every single year and their health insurance does not continue to rise exponentially, they figure they can afford a house in twenty years. He will be 49. I can't imagine just starting out on a tweny year mortgage so late in life. Yikes!

 

The biggest issue they face though is none have them will likely be with a single employer for more than five years. This generation is predicted to have to be a mobile bunch. Companies are no longer loyal to good employees. Regular pay raises and promotions no longer come from doing a good job for the boss. Management is pressured to do everything it can to keep payroll/benefit costs stagnate or continually lower. Good employees are not rewarded like they used to be. So the only way for the nedt generation to get ahead will be to have a valuable skill set, and regularly move to new employers so they can negotiate pay and benefits with the upper hand of forcing the issue with the current employer or getting a new deal from the prospective employer.

 

Gone are the days of getting out of vo-tech or college, landing with a good employer, and reaping the benefits of being a loyal, diligent employee. Gone. Ever increasing profits on the backs of fewer and fewer employees working longer and longer hours is the name of the game.