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7 Strategies For A Good Retirement

What To Do During Your Pre-Retirement YearsHow much money do you need for a good retirement? Many financial experts will tell you that you need 100% of your pre-retirement income. This might be true for those lucky corporate executives who leave their job with golden parachutes but it’s not very realistic for most of us. You can and probably will have to retire on a lot less than this. So what strategies could you pursue for a good retirement? Here are seven realistic ones.

  • Share and share alike
  • Determine where you stand
  • Go international
  • Take advantage of those senior citizen discounts
  • Downsize your housing
  • Refuse to subsidize your kids’ lifestyles
  • Find free entertainment

How to share and share alike

You could move in with one of your kids. You should pay rent but that would certainly be a lot cheaper than having your own place. Are you single? Then you might think about sharing a home or apartment with a friend or sibling. It’s true that two can certainly live cheaper than one. You might also be able to share a car, a TV, a computer and the cost of cable or Internet access. And you should definitely learnSenior man enjoying tropical vacation to live more frugally.

Go international

There is an even more radical way to cut your cost of living and that’s to pull up stakes and move to another country. Latin America is full of retirement enclaves from Mexico to Costa Rica to Panama and Ecuador. A new favorite is the country of Belize with its hundreds of miles of great beaches, beautiful tropical forests and even mountains. Americans who choose to retire there keep themselves occupied hiking, biking, fishing, swimming trekking, and the many other outdoor activities available in this country.

The cost of living in these countries is far less than the cost of living here and some even offer special programs for American retirees. For example, if you were to move to Panama you would not be required to pay income tax on any money that you earned here in the United States.

Some Americans actually go back to the land of their ancestors in Italy or Ireland, where they can get support from family members. Other people tout the attractiveness of countries such as Thailand and Malaysia. All of these countries are relatively safe, the cost of living is very low and the local denizens tend to respect the elderly.

Determine where you stand

The firm Fidelity Investments has reported that with the stock market increase that occurred this past year, the average pre-retiree now has a balance of $250,000 in his or her retirement plan. If you have a pension, it’s likely worth that much or even more. In fact, one of the things you should do is determine the actual worth of your pension. Let’s suppose it will be $1400 a month or $16,800 a year. Now, compare this with how much savings you would need to generate this much income. That would be roughly $200,000 with an annual interest rate of 10%. And the best part of your pension is that it’s probably guaranteed vs. the money you would invest in stocks or bonds that would be vulnerable to the vagaries of the stock market. If you’re not familiar with some of the basics of investing, here’s a video that explains the rule of 72 and the different investment options available.

Also, take a look at your debts. Is your mortgage paid off or almost paid off? Whatever you do, don’t take on new debt. If the only way you could buy a new car is to get a big loan, keep your old car and fix it up.

Take advantage of those senior citizen discounts

Don’t sneer at those senior citizen discounts. You could join AARP for discounts as well as your supplemental medical insurance. Check with your city to see if it offers real estate tax breaks as well as other discounts. Also make sure that you check out senior programs like low-cost meals, free transportation and health and medical services. Many cities have programs that are underutilized just because people are not aware of them or they are too embarrassed to ask. But hey, get real. These services are available so why not take advantage of them?

Downsize your housing

One thing you definitely don’t want to do is hang on to that big suburban house. If you have a limited retirement budget, sell it and move to a smaller place in a less-expensive neighborhood. You’ll have less maintenance and lower taxes. Just because the real estate market is shaky don’t put off the move. Remember that while you may get less for the home you sell, you’ll also pay less for that new place.

Refuse to subsidize your kids’ lifestyles

Once your kids graduate from college it doesn’t help to let them settle into their old bedrooms. They need to take wings, which means learning to cook their own food and live on their own. If there is some reason why you think one of your children should live with you, have him or her contribute to your cost of living. It’s only fair to the both of you and may be an eye-opening experience for him or her.

Find free entertainment

f your choice were to cruise the Caribbean or live in London, you would need 100% of your pre-retirement income. However, most people don’t do that. You can find low-cost entertainment options right in your hometown from summer concerts to fall festivals to senior exercise classes. Your library probably offers free seminars as well as book clubs, bridge clubs, lectures and movies. You should also be able to find many rewarding activities for your leisure time through your veterans association, social club or church. And all of these should be available free or at very low cost.

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