7 Out of the Box Ideas for Surviving a Retirement Savings Shortfall

Same here.....leaving California for the coast of Oregon where a couple can live on $1600 per month! !

I would say be very wary of a Mobile Home Park. A friend of mine pays around $550 a month for lot fees and that is $6,600 a year and more than my taxes on an average home here in CT. I do believe sewer is included and plowing of the roads, not her parking spot. She has to pay for water, snow removal, mowing too. The mobile home (manufactured home) is hers so all inside and outside repairs she has to pay for. The upside is that it is a bit more private than an apartment but lot size is very small. I would be more inclined to find a private lot to buy and put the manufactured home on it.

Hi Mary11, where can you live for so cheaply on the coast? Also can you live well--or does it feel like cheap living? will you feel deprived?

Thanks,
Jennifer

I would suggest anyone who is in their early 50's to start analyzing their financial status. Savings (401K, IRA's, bank accounts). Analyze money owed on cars, mortgages, credit cards, college loans. It might be overwhelming and what you owe might feel like there is no solution. I am not a financial expert but I might be inclined to sell the house, pay off the bills and then find a smaller home. Or if there is no mortgage, I might take out a home equity loan and pay off all debt. Then work like hell to pay that amount down. Taking a part time job with the income going towards the home equity pay off. Once that is all paid off, sock as much money into 401K, IRA's and savings as possible. I am saying this because you never know when your employer will pull the rug out and wham-mo, you are out of a job. It happened to me in my late 50's and I could never find an equivalent job. However, my Hub and I saved diligently, had no bills and survived. If we had had debt and low savings, we would have ended up in dire straits. Employers do not want older employees in many cases. Be prepared to get laid off in your mid to late 50's. It happens so often. The employers try to make it like a reward and give you money as a severance package. I ended up with two severance packages. I lost one job at age 51 after working for 18 years at one company. They were extremely generous. However, after all the severance money was gone and unemployment checks gone, still had no job, no benefits. Then I got another job and worked there 4 years and got laid off at age 58. This severance package was small but expected due to only working there 4 years. Lucky for me I was able to get 73 weeks of unemployment. That is when unemployment in the country was extremely high.

What are your thoughts on this. Let's say you get a zero percent credit card and were to pay yourself $10,000 from the card. Then make payments to pay it off. In the meantime you could invest that money into something. Like a Roth IRA. It would kind of be like a forced savings that you would have to commit to pay off and in the end you would have $10,000 or more depending on what you borrow.

Jennifer. ...we have lived on less than $2000 even living in expensive sandiego ca....if you don't have a car payment or alot of credit it can be done. We didn't feel deprived either. Of course we didn't take any long distance vacations but that was fine because I had done all of my worldwide travels when I was younger. Concerning Oregon, outside of Portland rentals can be had starting at $600 . Mfg homes start at $25000 with lot rentals of $400 monthly and that includes everything except for electricity. If you want to buy a lot that can cost you $40000. They have many apts for seniors starting at $300 even. You can rent a house for $800. Studio condo's on the beach run $100000....so there are many options.

The article should have been titled "Six out of the box ideas ...". Paying off debt prior to retiring is hardly an out-of-the-box idea.

Before moving to the midwest consider what you want to do in retirement. If you don't mind cold winters, and staying home, the Midwest might not be a bad choice. However, if you enjoy being outdoors, Midwest winters can be long and limits what you can do outdoors. Even if you are a cross country skier, skiing when it's 25 below and blowing, isn't fun. If you want to visit national parks, they are few and far between in the Midwest, you'll end up driving long distances or flying everywhere.

Matthew I live in Ohio. We have fantastic metro park systems. They offer year round quality entertainment. People from other areas come here to enjoy our well maintained parks, museums and libraries. If someone is bored living here that's because they aren't taking advantage of what's right in their own backyard. We have many options for free entertainment.

If you want a simple, straight to the point analysis of your retirement situation , check out a book on amazon by Darrow Kirkpatrick. He also has a website, can I retire yet dot com that has many articles that speak to other retrement issues.

I have no financial interest in any of his ventures.

I'm worried about living on $5000 a month. I find it
hard to believe you can live on $2000 a month.
I'm assuming you stay home 24/7?

Thanks for the article....that's pretty much what our plans are for the future retirement.

Skip Pepe, I agree. There are some expenses that just cannot be cut back on. Health insurance and realestate taxes. As the article says, you can downsize your home which would lower your RE taxes. Food is another items that is important so your health doesn't decline. However, most of us can't affort lobster, king crab, filet mignon every night of the week.
There are ways to lower your monthly costs to help the pinch. Call your insurance company to see if they can lower your rates, if not, call a few others. The insurance company I was with for probably 25 years wouldn't lower my rates and we never had an accident! I lowered mine by at least $850 thru AARP. Car insurance and house insurance plus an umbrella policy. My insurance was upgraded to a better policy too. Then when we retired, I called again to find out what mimimum we could pay due to putting low mileage on our cars from no longer commuting. They lowered it again. We had 3 vehicles and sold one which lowered the insurance again plus no more town taxes on that vehicle. Go thru all your bills and see if they can be lowered. Shop the sales at grocery stores. It doesn't have to become drudgery, think of it as bargain hunting! We bought ground beef this week 80/20% at $2.99 a lb and cooked it all up with onions. I separated it into 3 vacuum sealer bags and will add the meat into different meals such as spag. sauce, taco's, poor mans beef stroganoff. Buy a Blu Ray player and subscribe to Netflix and you will have more movies than you will ever watch if you like movies for around $10 a month. Our grocery store offers 7% off your grocery bill on Tuesdays. Look into your stores to see if they have that. I return soda cans and bottles and put that money into my piggy. I also have a Costco Visa I charge everything possible on, pay off the bill each month, and at the end February expect to get a rewards check of $440 just for buying the normal things I would buy or pay for with a check. Pinch your pennies, it can be fun and sometimes rewarding! How do you all pinch your pennies?

Our mobile phone bill is down to $25 monthly for unlimited everything without a data plan through Tmobile. We do everything by WiFi. Our car insurance is only $30 a month through Farmers. Contact your cable company several times until you reach the best person to speak to in receiving the best discount. Rent an apt....no property taxes. Give up your car and live in the city. Go to the senior center to get free food. Move to a smaller town where cost of living is much cheaper. Have higher deductible on your health insurance plans. You can accomplish that with under $1800 per month. Travelled the world already so don't need to do that, just happy not having to work anymore!

Another thing would be to move to a lower cost state. Georgia, in certain localaties, does not charge school tax to those 65 years and older. Plus, taxes on homes are lower to begin with. Some of you have reported taxes on a average size home in GA at $1,500. Whereas my average home in CT is about $5,000. So right there would be a savings of $3,500 before senior discount (school tax) kicks in. If the Senior discount chops off $600 then RE Tax would be $900 on your home then the savings would be around $4,100. Jim C from GA reported his Medicare costs as:
Part B $109.00
Part D $55.00
Part F $161.00
Total $325.00 (individual cost)

My Hubs costs now in CT:
Part B $134.00
Part D $67.30
Part F $241.50
Total $442.80 (individual cost)

If we moved to GA I believe the Part B would stay the same $134.00 but two people could save a couple thousand a year on Medicare Part D and Part F by moving to GA. So between Medicare/Medigap and real estate costs we could save around $6,000 a year or more by moving. Kiplinger lists Georgia as one of the most tax friendly states in the union.

Louise, I'm with you. I will be moving to Athens, GA in a few years from New York City. Can't wait!

Louise & Stacey,
Are you moving away from your children? That's a sacrifice I just can't make, no matter how much lower the cost of living might be.

J-Dog, I have no children so that isn't an issue. We have not even begun a plan to move anywhere and even though we have no children, living for 53 years in one town and its familiar surroundings makes moving a bit scary. Changing doctors, dentist, stores, car repair places. Everything new but that can be exciting too!

However, a move is becoming more of a possibility each day. The State of CT is not senior friendly. CT has serious financial problems and our governor keeps coming up with more and more price increases. The latest is a study on taxing us on how many miles you drive in CT in a year.

I would love to hear from Stacey and how you decided on Athens, GA! Here is a list of the 'best' places in GA and Athens is one of the towns. Have you visited Athens and what are home prices like? Why have you chosen Athens over other towns?

J-Dog, I feel the same way that you do. Family is everything to me and I will not leave family and life long friends to save money. Some people don't feel the same way. When my former in laws retired at age 60, they packed up and moved to Florida. They left parents, children ,and grandchildren behind and really never was part of their lives at all. They played a lot of golf and enjoyed it. My parents stayed and enjoyed many years with their children and grandchildren. It is a matter or personal preference and what makes you happy. For me, life is about family.

I don't have children but have an extended family that means the world to me. One of my nephews lives 45 minutes from Athens GA. In addition there are phones as well as skype to keep in touch. You never know where your family will end up and can't make your own decisions on proximity to them. Anyway I can't

My parents during the early part of retirement were snowbirds and had the best of both worlds. But, when they reached an age where traveling back and forth between Florida and Illinois was no longer possible, they chose to stay in Illinois. I think this was a big mistake. The northern winters are deadly for older folks. It is just too easy to get injured walking on ice and snow and driving in the bad weather, not an option. Older folks are literally stuck inside for months at a time.

I would never even consider spending winters in a cold climate. Certainly during the early part of retirement, most of the people here in Florida can simply fly or drive back north for holidays and the like. Family love to visit in the winter. Once people age, there are many more resources for older people in Florida, since we have a lot of us. And really, just being able to go out onto your balcony every day to get some sunlight when you are 100 years old can be a treat! Try to do that up north!

I have said I was not going to spend my retirement years in Louisiana, as I was born in Mississippi, not going to retire there either., but I may reconsider as I have a few acres of land there. I am one of those whose money will run out before I die( I think), so I want to give up home ownership for an apartment. As much as hurricanes scare I am considering looking for a place in Florida; Ft. Lauderdale, Orlando, or Jacksonville. I visited my son in Seattle, and it was beautiful, but It's snowing now. That's too far for me. I want to be able to drive within a reasonable amount of time to visit or get a quick flight w/o having to fly all over the place. Cold climates are not for me. I've experienced winters in Chicago and Beijing, China, impossible! My grandchildren are very young, so I must find the place with healthcare that helps me stay healthy, that's not here. The thought of not being able to do the occasional 'babysitting' a bit disheartening. I have stopped trying to find the place where weather is predictable, since that can't be done anymore.

I agree that family can be more than just one's children, siblings or parents. That said, for my husband and me, our children are as much our roots as we are theirs. We could leave the rest behind (although it would a difficult adjustment), but wouldn't want to live a state away from our kids and grandchildren.

We live in Southern California so our challenge is the high cost of living rather than cold weather issues.

We don't have any children either, but will be moving closer to friends and relatives. It's nice to have some connections and people to enjoy retirement with. So moving from California to the Oregon Coast is an easy change and all better on the budget! !

I'm having issues trying to decide if we should buy a home or rent in retirement. Our income will be $1600 monthly. I would appreciate any input on this subject.

Babyboomer55 you didn't mention if you currently own a home. If so, do you own it outright or are you paying a mortgage now?

I have an inheritance of $155000. Don't own a home currently. I've done all those free calculator apps and it always foes out that buying is better.

Nice inheritance! Use it wisely!

I would suggest you look at Home Equity Conversion Mortgage (HECM). Depending on your age and price of the home, you only have to put a down payment down on the home and never make a payment again. You then can put some of your inheritance money in the bank for a rainy day. Here is an article that explains how it works. Here is a snippet from the article:

For there to be equity to cover the accrued interest, the HECM for Purchase requires that you pay about half the home's sales price with your own cash. The reverse mortgage picks up the difference. "Essentially, the money you're putting in is your equity," says Ted George, a certified financial planner in Scotts Valley, Cal.

Buying is usually the best choice as property should gain in value overtime. Not all property does gain in value. Buying in a growing neighborhood with goods schools always helps to improve the value of your property.

Florida is one place where the property values rise and fall like the tide! So use caution and do your research when considering purchasing a home!

I agree with Ron about home ownership. Something about renting just doesn't set well with me. However, if you are moving to a new area it might be prudent to rent for a while so you can get a feel for the area without strings. The other negative about home ownership are the hidden costs. In most areas you will need to do grass cutting which will require a riding mower or if you have a tiny yard a push mower. You will need all kinds of yard equipment like a weed whacker, leaf blower, hedge trimmers, shovels, rakes, snowblower if you live in a snowy area. In the fall in some areas you need to do fall clean up and get rid of the leaves. If you choose not to do the work yourself, you will need to hire someone to do all these chores. It is expensive either way. If you do it yourself it is time consuming, hot and buggy work, cold in the winter. Up north you have to be careful to keep your heat up if you have hot water baseboard heat otherwise in very frigid weather pipes can freeze and burst. Water will be everywhere. If you buy an old house, you may be faced with a money pit of never ending repairs. If you have a well and not city water, your well could go dry which means a new well might need to be drilled. If you have a septic system and are not on a city sewer system, you have to have your septic pumped every few years otherwise your septic system may fail and you will need to replace it. Both septics and wells are very expensive to replace. Home ownership is wonderful but being a renter has it's good points too. Unless you have a miserable landlord who won't do anything. We have a well and have had to replace the pump in the well twice, once due to a lightening strike. The pump another time was sucking sand and had to be raised up. Our septic system failed due to a contractor that was a scam artist. We had to replace it about 5 years after we built our house. We had some terrible storms in October a few year back and many of our trees were in such bad shape we had to have tree guys come and cut some down and trim some. A few thousand dollars worth. Insurance didn't cover that. When our septic system failed, I had just gotten laid off from a job I had for 10 years. I got a small severance package and the money I got just covered the cost of the septic system. I cried my eyes out over that. The hidden horrors of home ownership! Lots to think about!

Thanks Ron. We are actually planning on moving to coastal Oregon from California. Rentals are much cheaper in Oregon but would still prefer to purchase a home.

Thanks Louise for the input....now I'm wondering if it's just better renting and investing the money...lol

Babyboomer55, don't let my negatives of the hidden costs turn you off. Hub and I build our house in 1975 and we have had our share of normal issues over the years. It is frustrating at times but home ownership is worth it as long as you have a cushion for what insurance doesn't cover. There is also something else a homeowner can consider and that is an insurance policy to cover all kinds of problems. When I was selling my Mom's house the realtor suggested this insurance policy that would cover a lot of stuff inside the house. Like appliances, plumbing, heating, ac and much more. It really was to give the buyer confidence to buy the house knowing that if something major broke down, this insurance policy would cover it. My Mom's house was old and from 1932. It was in decent shape but needed a facelift. So we bought the policy and the realtor made sure she had all the brochures on it in the kitchen so a potential buyer could see it. The policy was for a year. However, these policies can be bought by homeowners to protect themselves. You don't have to be selling a house to buy this insurance. I have been tempted but have not yet. If by chance your dishwasher (appliances) should break, they will send out a technician to try to fix it. You get charged a fee like maybe $100. If the thing can be fixed it will be fixed. If it can't, the insurance company will replace the unit. Same with other stuff in your house. I cannot remember the cost of the policy but maybe like $400 a year, maybe more. It was worth it to me to help sell my Mom's house. I would rather live in my home than rent any day of the week. When I was a kid my parents rented for years and years and it was horrible. We had landlords that were not that great and they raised the rent every year. They controlled the heat too. I recommend buying but just be very, very careful and do lots of homework!

Yes, I also have that home insurance. My trade fee is 60$. Several years ago the blower on my air conditioner went out . They replaced it and I only paid the trade fee. The cost was about 600$. Hot water heaters and leaks in pipes under ur house as well. Worth the cost absolutely. I pay about 435 a year.

Another question I have is .........if anyone would recommend purchasing an immediate annuity. I'm going back and forth from that or just investing around $100000 elsewhere. Since I will have approximately $150000 to purchase a home and invest the rest I'm concerned with losing value of the money as years go by....