Retirement Income - Less than You
Think?
By
Vincent Moloney MD
It is widely written
that you need 75% of your present
income to maintain your present
life-style in retirement. If you
make $100,000 now, figure $75,000 in
retirement. If you need
$50,000 now, figure $37,500 in
retirement. The average retirement
income in the US is $27,000. See
what you think after reading these
ideas.
Some really
significant expenses you won't have
in retirement:
-
Life insurance.
Usually paid up by now or it has
run its course. Also there is
little need for it. No premiums
to pay.
-
Mortgage
payments. Houses are usually
paid off by now.
-
Child-rearing
expenses. A big one. Unless you
got a really late start.
-
College costs.
You saved for it and then paid
for it over many years. See
bullet #3.
-
Work expenses.
Transportation, clothing,
lunches, etc.
-
Large house.
Selling and moving into smaller
digs can add significantly to
your nest-egg and reduce
expenses for taxes, maintenance,
insurance and utilities. A
reverse double whammy for this
one.
-
Automobile
expense. It/they should be paid
off and might be used less.
-
Credit card
payments. Most everybody has
learned by this time not to have
this debt.
-
Some people move
to an area where the cost of
living is very significantly
lower.
-
Last and this is
my favorite. You don't have to
save for retirement anymore!
Jot down a figure for
each one and see what you get.
These are some
further considerations that might
reduce your expenses. Where is it
written that you won't want to
change your life-style at all? After
all as we get older our tastes
change, often towards those
activities that cost less and we
appreciate simpler things.
A walk on the beach
or in the quiet woods, in the
morning sun or even in a light rain
can be as enjoyable as anything.
Some of the best things in life
really are free. A cold winter
evening by a warm fire with a great
book (free from the library), a
visit with the grandchildren and
pulling vine-ripened tomatoes from
your own plants are more examples of
inexpensive activities. Who needs a
riotous evening in a nightclub or an
expensive day at a casino?
Linger over coffee
and the newspaper in the morning,
have breakfast with friends, take a
little nap in the afternoon or day
trips to attractions like museums,
planetariums and nature exhibits.
Aren't there things you always
thought you might like to do and
explore like writing, playing music,
dancing, sports (non-contact) and
crafts and hobbies? These need not
cost a lot.
Also remember you are
free to take advantage of early-bird
specials, two-for-one nights and
eating out at lunchtime instead of
dinner. These can save as much as
half on restaurant bills. Don't
forget senior citizen discounts,
either.
What might cost more
now that you are older? Health care,
of course. Putting these in bullet
form:
-
Health insurance
premiums. Mainly Medicare
supplemental insurance. Figure
2000 dollars and up.
-
Prescription drug
costs, both premiums for
insurance and out of pocket
expense. Most medications not
yet off patent (have no generic)
are 800 to 1200 dollars a year
each. The arithmetic here is
easy.
-
General
out-of-pocket expense.
-
Long term care or
nursing home care. Premiums for
insurance if you elect to buy
it, although the jury is still
out on whether or not you should
according to a leading
consumer's magazine. The biggest
expense of all is nursing home
care if you have no insurance.
People who have good support can
often remain at home for a long
time utilizing home care
facilities, which costs a lot
less.
Naturally every
situation is different. Hopefully
these thoughts will help you in your
calculations. If you add up all that
you don't have to pay and what you
can reasonably expect to pay and can
avoid a long nursing home stay you
may need less than you thought.
A recent article in
Money magazine had a good idea.
During the last year before
retirement, try to live on what you
expect to have, pretend to be
retired. If it is comfortable, you
are probably good to go.
About the Author
Play music like
you always wanted. Gain the
knowledge you need to learn rapidly
and cut out most of the practice
drudgery. Dr. Moloney is a retired
Family Practitioner with a lifelong
interest in music and teaching.
Empower yourself to take charge of
your music learning by studying his
E-book.
http://www.musicsimplified.com/
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