Retirement Talk
WHAT to do with the rest of your life? |
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Episode 178 How Much Money Is Enough?
Relativity is a word we associate with
Einstein and physics.
Relativity is a word I closely associate with retirement. The amount of
money
you need is relative to the way you wish to live. The wife of the owner
of the
Los Angeles Dodgers baseball team recently asked for one million
dollars per
month in a divorce settlement so that she could live in the manner in
which she
is accustom. We could assume she is use to living relatively well. Most
of us
would probably consider a million dollars a month more than adequate.
You can
live on a lot of money or you can live on little. When considering
retirement,
in most cases, the choice is about how you want to live; not weather or
not you
can afford to retire.
This is Retirement Talk. I’m Del
Lowery. Today's program is
entitled, "How Much Money Is Enough?"
Of course retirement costs are closely tied to time we have
left to live. How much does that cost? None of us know do we? Several
friends
of mine in Alaska had planned well for a long, comfortable retirement.
They had
invested carefully. They planned on traveling to exotic places. The
investments
and carefully researched destinations didn’t help them. One died
within months
of retirement in a car accident. The other within two years of cancer. They were in their early sixties.
My mother lived to age 92. Her only
income after reaching 65
was social security. She saved money every month. Health care was
covered by
Medicare. She lived in a home that was mortgage free. She didn’t
own a car. She
could walk to the grocery store, drug store, post office and doctor.
She lived
a very low keyed life focused around family, church and community. It
suited
her. Financially, retirement was easily realized.
When we retired we tried to assess our
financial position by
letting some very basic numbers speak for themselves. There were two
factors to
consider. First, how much would it cost us to live in a manner that
would
please us, and secondly, how much money would we receive in retirement
income?
We got out a piece of paper and wrote
down some basic
expenses. Two major expenses were covered. We had just paid off our
mortgage.
And our retirement package included comprehensive health care for life.
(Years
later a university financial professor told us that we had the best
health care
package he had ever seen.) We were lucky. We would still have to
provide for
taxes, insurance, utilities and upkeep. We wrote down what we
considered a
generous sum to provide for these housing costs. Then we listed food
expenses
for a month. Again we tended to be generous. Next we listed automobile
and travel
expenses. A few other factors were considered and listed: travel,
education,
entertainment, savings, etc.
It was easy to draw a line and
determine a total. It amazed
me at how little money it would take to allow us to live the way we
wanted. The
next step was to look at what our retirement
income would be. It was obvious
that if we were to continue working at our jobs it would be because of
something other than money.
We always joke that our comfortable
retirement was provided
by the decision to not buy a boat, an RV, or another new car. Not sure
this is
true but these items never appeared on our radar as necessary nor
desirable in
our retirement.
I’ve always thought the best
financial advice ever given was
the line, “Spend a little less than you make”. I know that
when we were working
and gaining increases in wages each year our spending always increased
to keep
pace. When the yearly total decreased our expenditures seemed to
decrease right
a long with it. Not a problem.
It has been 23 years since we figured
out, "How much
money is enough" for us. Our calculations were correct. We still save
money every month. And, I think our friends would all agree that we
live very
well. We have never had regrets about retiring early.
This is Retirement Talk.
A resource from a listener: Best Free Online Degrees for Seniors guide is designed to assist seniors who aspire to enhance their intellect or consider starting a new career path. It features an overview of the top online degrees for seniors, emphasizing their numerous advantages, and a broad range of subjects to choose from.
A friend's website: Terra Firma Designs: Fine Furniture, Stained Glass and woodworking workshops.
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