Retirement Fears

[rblammon]

I am getting ready to retire in 2012. What was your biggest fear about retirement. Did it come to pass?

[GeorgeT]

I'm not retired yet but probably within 2-3 months, I'm only 57 and my wife is 50. Of course my biggest fear is running out of money or a major medical problem. I used to worry about what I would do to keep busy but not anymore since I bought a home in The Villages!

[Avista]

We were really excited. Don't remember any fears.

[dgammon6]

What fears???....... Couldn't wait to get here.

[Tom Hannon]

What fears???....... Couldn't wait to get here.

WEll said DG

[superbat]

I was afraid I would die before I got here.

[rjm1cc]

Unless you have a pension and employeer provided health insurance I think money is a big question mark that does not have an answer for most. You can not control your life expency and probably have no idea if you will hit major medical excpenses. You can offset part of this worry with annuities (be careful on fees and consider the effects of inflation) and health/long term care insurance.
You might want to postpone your social security until you are 70, spouce should probably take now. It is cheaper to postpone SS than buy an annuity. SS has a number of options on how to take so study this area.
In general the retired set tends to keep saving money in retirement. Probably since you don't know what the future holds. Thus figuring out how much money you can/should spend each month is the bigest problem you have where you can make informed decisions. I am thinking you might spend too little.

[ssmith]

Not retired yet...biggest fear??? That by the time I retire the building will be done in TV and the cost to buy a home will be beyond our reach and /or that the government will screw up the economy so much ...that we will never be able to retire. My husband is 56.

[whartonjelly]

My fear is also dying or my husband dying before we are able to sell our house and move down. Will know more before March.. Almost sick over thinking about not getting to TV! We both are healthy now but one never knows.!

[Bill-n-Brillo]

"Fears":

- Will we be able to make our savings last the rest of our lifetimes? (Nobody knows how long they'll live so that part will never be resolved) No pension for me, no company-paid health coverage for either of us after Sandy retires....and her pension will probably only cover the cost of her healthcare coverage.
- Will our collective health hold out? (Again, a somewhat moot question, other than the fact that we can try to do the right things to remain healthy)
- What will SS and Medicare look like when we get there? (we're in our mid/late 50s).
- What will happen with the general economy and inflation over the course of the rest of our lifetimes?

There are sooooo many things to get hung up on if you let yourself go down that path. Many of these kinds of things are beyond our control. We're committed to doing the best we can with the things we CAN control:

- Maintain a reasonably healthy lifestyle
- Continue to save and invest wisely, as best we can
- Manage our spending
- Maintain "a low overhead operation" - zero debt is the ideal situation.

For us, it's a balance between a couple of somewhat conflicting philosophies: "Enjoy life to its fullest while you're here and able" and "Always save for tomorrow".

:)

Bill

[DaveK]

Well said, Bill.

As for the healthy lifestyle, my wife and I go regularly to the gym in addition to eating healthy foods. No fast foods and no prepared foods, insofar as possible (less expensive too.)

We continue to live well below our means so that any excess funds can be invested wisely. Credit cards, which seem to be a necessity these days, are paid off monthly. When we went into retirement, we had no debt and that has continued. If you don't have any monthly payment, it is easier to economize.

We hope to maintain this lifestyle until we move to TV in 2011.

[Pturner]

My biggest fear is running out of money. We have saved all of our lives. It's scary to start drawing it down, not knowing how long we will live. My hubby's biggest fear is working his whole life and never getting to enjoy the retirement we've saved all of our lives for.

[graciegirl]

My biggest fear is running out of money. We have saved all of our lives. It's scary to start drawing it down, not knowing how long we will live. My hubby's biggest fear is working his whole life and never getting to enjoy the retirement we've saved all of our lives for.

Our thoughts exactly.

[memason]

My biggest fear is running out of money. We have saved all of our lives. It's scary to start drawing it down, not knowing how long we will live. My hubby's biggest fear is working his whole life and never getting to enjoy the retirement we've saved all of our lives for.

PTurner.... You're right on the money, so to speak. Finding the balance between spending and the unknown of health issues is a tough decision. It's really hard to decide when enough is enough ...

I think I've had enough and have enough, but stay tuned ????? Sometimes your company can make it very hard to walk away...

[GeorgeT]

"Fears":

- Will we be able to make our savings last the rest of our lifetimes? (Nobody knows how long they'll live so that part will never be resolved) No pension for me, no company-paid health coverage for either of us after Sandy retires....and her pension will probably only cover the cost of her healthcare coverage.
- Will our collective health hold out? (Again, a somewhat moot question, other than the fact that we can try to do the right things to remain healthy)
- What will SS and Medicare look like when we get there? (we're in our mid/late 50s).
- What will happen with the general economy and inflation over the course of the rest of our lifetimes?

There are sooooo many things to get hung up on if you let yourself go down that path. Many of these kinds of things are beyond our control. We're committed to doing the best we can with the things we CAN control:

- Maintain a reasonably healthy lifestyle
- Continue to save and invest wisely, as best we can
- Manage our spending
- Maintain "a low overhead operation" - zero debt is the ideal situation.

For us, it's a balance between a couple of somewhat conflicting philosophies: "Enjoy life to its fullest while you're here and able" and "Always save for tomorrow".

:)

Bill

Bill,

I agree with you completely. One thing I would add is that expenses will most likely decrease as we move into our later years baring any medical issues. I also agree with PTurner that it is scary to start drawing on a 401K after I've programed myself to save, save, save all my life. There comes a time when you need to take the leap. Everyone needs to find that happy medium where you are young enough to still enjoy the first 15-20 years of retirement but old enough to have your savings last. Very tough decision. I think we'll be OK because I'll enter retirement with zero dept and I'll always have a reverse mortgage in my back pocket if needed. I'm still scared to death (no pun intended) to see how my plan works out but I choose to "live" now and deal with shortcomings later. What can anyone to to guarantee a safe retirement unless you're a multi-millionaire, even then people tend to live up to or beyond their means.

[Avista]

We live below our means. Did not buy the most house we could afford. Redo our budget each Dec for the following year. We love living in The Villages. So many things to do that do not cost anything. We love to eat out, but are very careful regarding prices. We usually chose lunch instead of dinner. We are having a wonderful time.

[LI SNOWBIRD]

I was afraid I would die before I got here.

I was with ya on this. Both of us are retired now and finally snow birds. It was worth the wait for paradise. Hang in there your time will come

[Vinny]

My worst fear is lowered Medicare and SS benefits in the future.

[eyegirl]

To anyone who lives in TV.... do most people feel that the expenses listed on their website are accurate? (they say they are for a $250k home)

[Pturner]

We live below our means. Did not buy the most house we could afford. Redo our budget each Dec for the following year. We love living in The Villages. So many things to do that do not cost anything. We love to eat out, but are very careful regarding prices. We usually chose lunch instead of dinner. We are having a wonderful time.

Hi Avista,

I think you're a Nook and I'm a Kindle :laugh:, but I'm with you on this. We've always lived below our means. Bought less house than we could afford. No debts. Saved. Saved. Saved. You encourage me that we can do this. Become frogs, I mean.

ribbit

[brostholder]

The last time I was down in TV, I was fortunate enough to get to sit around with a couple of old Bocci players. Most of the guys were Italians from the NY and NJ area and a bunch of them had pensions they were living on from the construction industry. But there were a few guys that didn't have pensions and had pretty modest savings. They told me they were having the time of their lives living in the villages. One guy in particular said they he and his wife were quite fortunate because they loved to cook and warned me that eating out on a regular basis gets expensive in a hurry. After listening to them for awhile, I decided that with all the free activities in TV plus all the things I am already paying for (like golf), that if I modify my present lifestyle (expensive restaurants, good wine, premium beers) just a little bit and eat at home more often, then I wouldn't have to wait another 3 years to retire, but to do it now. I guess they reminded me that good times are more about sitting around with friends then spending lots of money.

[Avista]

Hi Avista,

I think you're a Nook and I'm a Kindle :laugh:, but I'm with you on this. We've always lived below our means. Bought less house than we could afford. No debts. Saved. Saved. Saved. You encourage me that we can do this. Become frogs, I mean.

ribbit

Don't we both love our e-books! Sounds like we think alike regarding style of living too. I heard it said, "The Villages gives you a Champagne lifestyle on a Beer Budget."

[Boomer]

You probably already know this, but, just in case......

Staying out of tax deferred accounts such as a 401(k) or 403(b) or IRA's for as long as possible, of course, continues to avoid that tax hit. Who knows what taxes will be in the future, but for now…..

If your retirement philosophy is to stay out of tax-deferred investments by spending your taxable income first, you might find that you are sort of pleasantly surprised at tax time.

As you know, net worth and income can be two very different pieces of the retirement puzzle. If you can keep your income down in retirement, for a while anyway, you might be surprised at how the write-offs can kick in and give you more money in your pocket than you thought you might have.

Health care costs can take a significant chunk of retirement income for many. One thing that might be new though is that for the first time, you just might find that you can write off a part of your medical expenses, including dental, vision, and insurance premiums because your income is lower in retirement. And if you have tax-deferred money available, staying out of it might give you more of a return than you thought, at least for now.

I think the current number for medical deductions is the amount that exceeds 7.5% of AGI. I know that’s a lot, but with your income lower and your health insurance premiums possibly higher and maybe some LTC insurance premiums in there somewhere, and maybe needing glasses and/or contacts and some dental work, you might find that it can be worth adding up every scrap of paper associated with medical expenses – even if you have never been able to use the deduction before.

Now, please promise me that you will not take tax advice from some woman named Boomer on the internet who is not a CPA or a CFP and could even be an English major for all you know.

So anyway, if this post gets your attention, you might want to have a look at IRS Publication 502, and you should consult a tax accountant. Don’t take tax advice from me. I will not bail you out of jail. Of course, your CPA probably would not bail you out either, but at least he might go along to keep you company. Oh well....I digress.

Back to medical deductions. Here is an IRS pub on the subject. (I do not know if there will be any changes for 2010, but this publication can get you started if you are interested in learning more.)

http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178947

I probably will show up in this thread again because I can’t stay out of discussions about retirement financial planning. But please be aware of my disclaimer, highlighted in red, above.

Boomernita Van Caspel

[Ohiogirl]

Please, Boomer, stay in these discussions - I've learned a lot from your financial posts!

[KayakerNC]

You probably already know this, but, just in case......
Staying out of tax deferred accounts such as a 401(k) or 403(b) or IRA's for as long as possible, of course, continues to avoid that tax hit. Who knows what taxes will be in the future, but for now…..
**snip**
Boomernita Van Caspel

Oh sure, you youngsters have that option...but sooner or later MRD is going to bite you on the backside. :boom:
Not complaining actually, I'm happy to have reached that point.:pepper2:

[2BNTV]

I am getting ready to retire in 2012. What was your biggest fear about retirement. Did it come to pass?

rblammon:
1. Selling my condo so I can move to TV. It hasn't sold in a year and the prospects don't look encouraging at the moment.
2. To get to TV while I am still healthy enough to party hardy!!!

All other concerns are something everyone has to deal with like having enough money to last and health concerns with the medical coverages that are available.

I do the best I can and then try to relieve these concerns with, "Man plans and GOD laughs".

[Boomer]

Oh sure, you youngsters have that option...but sooner or later MRD is going to bite you on the backside. :boom:
Not complaining actually, I'm happy to have reached that point.:pepper2:

Hi Kayaker,

Thank you for saying that I am a "youngster." But I gotta tellya, when you mentioned that MRD, it almost caused me to write another post in which I would have ended up parading my angst over conversion to Roth. But I knew that I would just fret around and come to no conclusion and continue to procrastinate on that one.

I see by your post that you are now a septuagenarian, and I bet your MRD's are going to find a much better tax environment than mine will when I reach that point. And besides, don't forget that 70 and 1/2 is the new 50 and 1/2 -- except where the IRS is concerned.

Boomer

[GeorgeT]

Forgive my ignorance but what is an MRD?

[gongoozler]

I retired at 56 and never looked back . . . the secret is to have friends and keeping busy. In TV there are so many things to do sometimes I have to schedule my week completely in advance but what you do depends on your health. I've thought about helping out with the AARP tax program but playing pickleball, tennis and golf each day and then shooting pool,working out at the gym or going biking leaves me with little to no time. My son said just keep doing what your doing dad until you're too old to do it then work part-time. Financial affairs are a personal matter depending on what it cost you to live but I just bought a courtyard villa cash as an investment (banks are paying nothing and the market is rocky) and just renting it 4 months a year buts me ahead.

[Pturner]

Forgive my ignorance but what is an MRD?

Minimum Required Distribution.

[l2ridehd]

My biggest concern is the money printing being done. Talk about wealth redistribution. If cumulative inflation hits 75 to 80 % ( a conservative estimate) over the next 5 to 10 years, everyone who has something will find it worth a lot less. Those that have very little will have a lot less impact. This was Karl Marx plan to destroy the currency and maintain his power. For some dumb reason our elected officials seem to want to go down the same path. I just can't afford to have my investments worth half what they are today and still retire. Nothing learned from history I guess.

Think about this latest plan to freeze Federal pay. And honestly I have no interest one way or another. However that will save 5 billion over 2 years ( the maximum time it will last), and yet we spent 750 billion on a useless stimulus bill full of pork barrel projects and another 860 billion on a health care bill.

I just don't understand their thinking on either side of the party fence. Something is very wrong when you spend money like drunken sailors and then try to take it out on the backs of the workers.

[Ohiogirl]

I retired at 56 and never looked back . . . the secret is to have friends and keeping busy. In TV there are so many things to do sometimes I have to schedule my week completely in advance but what you do depends on your health. I've thought about helping out with the AARP tax program but playing pickleball, tennis and golf each day and then shooting pool,working out at the gym or going biking leaves me with little to no time. My son said just keep doing what your doing dad until you're too old to do it then work part-time. Financial affairs are a personal matter depending on what it cost you to live but I just bought a courtyard villa cash as an investment (banks are paying nothing and the market is rocky) and just renting it 4 months a year buts me ahead.

You know gongoozler, we just moved into our CYV after renting it out for 4 plus years. I may really really really miss the tax deduction, but my taxes seem to be in flux anyway for the next few years, so time will tell.

However, you have a point. Those of you who maybe are thinking of being snowbirds might want to consider buying a CYV or patio villa and renting it out Jan-March for the really big bucks (when the weather is iffy anyway, and using it yourselves fall and spring. I met someone golfing (from England) one time who did just that. Spent 3 months here in the fall and another 3 months in the spring. You could spend an extra day and become Florida residents for tax purposes.

Maybe you have friends or relatives you can visit for a couple of weeks here and there during those really cold months up north - Jan, Feb. and March, and using it during the mostly dependable months of November, December, April and May. Especially if you're from way up north, where October and April and May are still usually nasty. Or maybe you can take a cruise in Jan. and then visit friends.

Winter up north is not so bad if you can get away from it for a little while, and have April to look forward to in TV.

And - I couldn't figure out how to quote 2 posts, but George T, I don't know what MRD means either.

[GeorgeT]

Minimum Required Distribution.

Thanks PT. I don't think I'll ever need to worry about that!!!!

[Ohiogirl]

Thanks George T, I missed that. But you know, 70-1/2 doesn't sound very old suddenly. How'd that happen?!!!

[Boomer]

Forgive my ignorance but what is an MRD?

Hi George,

The MRD is that thing that kicks in at age 70 and 1/2 when the IRS won't wait any longer to start collecting income tax on tax-deferred retirement accounts. It's called the Minimum Required Distribution. But I think I have also seen it called the RMD.

It's when it's time to start paying the piper -- although I really never thought of the IRS as a piper.

There is a formula that calculates the minimum the taxpayer has to withdraw each year after age 70 and 1/2.

I always thought it was weird that it is called a distribution. Seems like it should be called a withdrawal.....But.....nope....it's the IRS calling it that -- wouldn't want to make things too clear.

Boomer

[GeorgeT]

Thanks Boomer. I'll not need to worry about that. I won't have a pension or medical from my current employer so I'll probably start collecting SS at 62. I ran the numbers already.

[Bill-n-Brillo]

Sandy and I should be so lucky as to have to worry about being forced to take the minimum distribution when we reach that point!!! :)

Bill