The perfect time for retirement doesn’t exist.
This is what we have learned in our almost three decades of financial independence. Things change, and sometimes radically. There simply are no guarantees.
From our point of view, a full and rich retirement is still possible for many people right now. Sometimes it takes personal flexibility in how one’s retirement is defined, as well as self-discipline and commitment to making one’s dream happen.
Many potential retirees will find themselves working part-time to supplement their retirement lifestyle and perhaps to obtain a medical insurance plan. They may work from home in a virtual style of employment, make money from their hobby, or take advantage of a less stressful second-career opportunity.
Medical tourism will become more commonplace, as corporations look for financial alternatives to providing health care for their employees. As this idea becomes more familiar, retirees and potential retirees will consider this type of health care as a viable option if they are underinsured or if their own health care plan is lacking or if it’s too expensive to maintain.
Moving to more affordable countries such as Mexico, Panama, Ecuador, the Philippines, Costa Rica, or Thailand will also become more attractive to those whose portfolios have been compromised for one reason or another. One can live a reasonably comfortable lifestyle in these countries for far less than in the United States or Canada.
Grander retirement dreams may be scaled back, but that is not necessarily a bad thing. Less can be more when one’s retirement money is spent for living rather than for maintaining things.
If one’s future retirement life is based upon the idea of keeping the same level of spending after there is no longer a paycheck coming in, you could be in for a shock. But if you have learned to live below your means, have kept your monthly expenses reasonably low, and have not loaded up with huge amounts of consumer debt, then the road of retirement ahead will not pose a threat.
People will still retire, but how people actually live life away from the working world will continue to evolve. Creativity, flexibility, and the trend toward simple living will take on more value as their use will provide options for a quality retirement.
If you find yourself debating about the sort of retirement you may face, the following suggestions may provide alternatives:
1. Prioritize. What is important to you in your life? Keep that list as simple and as clear as possible. The simpler the list, the easier it will be to make it happen.
2. Do the math. You might need to downsize your home instead of keeping one that is taking up too much of your current monthly income. The smaller the house, the smaller the mortgage, the less you will pay for utilities, repair, upkeep, furnishings and insurance. This “newfound” money can be put to use elsewhere in your plan.
3. Review the options of relocating. Moving to a tax-friendly state or to a state or country where the cost of living is less than where you are living now is worth your consideration. Taxes and the daily cost of living play a huge part in the amount of money one will need for retirement. Want to keep in touch with friends and family? Try any of the many VOIPs available – Skype, FaceTime, WhatsApp, Zoom… The money you save by relocating can be used to purchase airfare to visit in person.
4. Consider other work possibilities. If the idea of fully retiring frightens you, consider working part-time, cutting back the hours at your current job, doing consulting work, or starting a second career. You’ll still earn income, but you may not have the same work demands of your current job. You may want to work from your home or make money from your hobby. Even a little bit of income can go a long way in stretching your retirement dollars. Exchange services with neighbors or friends, and check out places like Craigslist or Simbi for how you can exchange services with your community.
5. Streamline. Examine recurring monthly expenses in a new light. Items such as having a landline and a cell phone plan at the same time can add up. Do you need more than basic cable? Review your insurances and keep them up to date. You may be paying for more than you need. You might also consider using a bicycle, public transport, sharing a car or going car-free.
6. Track your expenses. Before you retire, track your expenses for two years. If you are already retired, begin tracking them now. Find out where your money is going. You may be surprised to find places in your budget where you can live without that expense. Are you paying for storage you don’t need or use? Do you have an extra car or two when you can get by with one? Are you paying for a boat slip or boat insurance that is no longer really necessary? Perhaps you can replace a gym membership with outdoor exercise, or join Netflix for your movie treat.
7. Pay down debt. After tracking your spending, streamlining your monthly expenses, and possibly downsizing your home, use this newly discovered cash to pay down debt. Seriously weigh the idea of being mortgage-free, or not maintaining a car loan. You’ll be in a far better position to retire comfortably if you are not lugging the burden of unnecessary debt into your future plans.
8. Make your dream yours. Give your dreams substance. Don’t hide in a holding pattern or delay striving for your ideal future “until things get better.” Know what motivates you toward your dreams and write them down. Post them up and keep them in mind every time you get the urge to give up, or when your interest flags.
If you create a personal relationship with your particular bright future, then no one can take it from you. If you know why your dreams are important to you, it will put power behind figuring out how to achieve them. Don’t let anyone drive a wedge between you and your dream.
In short, we recommend being flexible and creative in describing your retirement dream. Open up to possibilities that you may not have considered before. Join online forums on topics of interest to you to find community and become self-reliant in creating the retirement best suited for you. You may not be able to control the markets or world events but look to what is within your power to change and improve: Your own circumstances.