Retirement Income Needs---Less Than You Think?

It is widely written that you need 75% of your present
income to maintain your present life-style in retirement. If
you make 100 thousand now, figure 75 thousand in
retirement.
Fifty thousand now, figure 37.5 thousand in retirement. The
average retirement income in the US is 27 thousand. See what
you think after reading these ideas.

Some really significant expenses you won't have in
retirement:
1.Life insurance. Usually paid up by now or it has run its
course. Also there is little need for it. No premiums to
pay.
2.Mortgage payments. Houses are usually paid off by now.
3.Child-rearing expenses. A big one. Unless you got a
really late start.
4.College costs. You saved for it and then paid for it
over many years. See #3.
5.Work expenses. Transportation, clothing, lunches, etc.
6.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.
7.Automobile expense. It/they should be paid off and might
be used less.
8.Credit card payments. Most everybody has learned by this
time not to have this debt.
9.Some people move to an area where the cost of living is
very significantly lower.
10.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 table form:

1.Health insurance premiums. Mainly Medicare supplemental
insurance. Figure 2000 dollars and up.
2.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.
3.General out-of-pocket expense.
4.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.

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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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About the Author

Dr. Moloney retired from Family Practice several years ago
but has retained his lifelong interest in music and
teaching. He has written a book explaining and simplifying
music. http:/www.musicsimplified.com