Ten Signs You’re Not Prepared for Retirement
One of my goals this year is to become better prepared for retirement. I’m the first one to admit that I’m starting late. I have a small pension plan set up, but I don’t feel confident enough to completely rely upon it come 20-25 years from now. I’ve also had some close friends recently retire and realize that poor planning can cause undue anxiety and uncertainty; something I don’t want to worry about when I reach retirement age. For September, I marked down in my calendar to begin a 403 (b) to help support my piddly pension plan. Though I won’t be able to contribute to it as much as I’d like in the beginning, at least it’s a start!
Learning from others mistakes, here are my top ten signs you’re not (or I’m not) prepared for retirement:
10.) “Gone Fishin’” or camping is a slogan you wish to live during the retirement years. Reality check: Though camp site fees range from free to $20 a night, camping every night in a tent or camper is unrealistic. Most camp sites have a maximum-night stay and the large, comfy RV’s are expensive (about $275K for a base model!). I love camping, but when I’m 70 I may not want to be warming myself over a camp fire every night.
9.) You don’t plan to live long after retiring. Reality check: People are living much longer these days. Even if you retire at 65 or 70, you might have another 15-20 years of living to do. Trying to eek out an existence for an additional 10 years on an income you originally thought you’d need for only 5 years is tough.
8.) You plan to work until you drop dead. Reality check: People have many different definitions for retirement, such as working part-time. This is a great way to supplement a retirement fund, but deciding to NOT plan for retirement because you think you’ll just keep working isn’t a plan at all. Though people are living longer these days, illnesses and disabilities are a reality of growing older. (I just rode my bike a few miles the other day in 100+ degree heat and let me tell you: I’m too old for that crap!)
7.) You’re banking your nest egg on the sale of your home. Reality check: Prior to the real estate’s bubble rise and fall, most people didn’t consider their home or property their retirement fund. However, during those few years, people began thinking more about how the sale of their home could be their nest egg. Unless you purchased your home many, many years ago at a bargain-basement price, counting this as part of your retirement fund may not be such a good idea due to the volatility of the real estate market.
6.) The federally-funded nursing home is looking more appealing every day. Reality check: No one plans on ending up in a nursing home before the age of 65. However, poor planning combined with poor health equals limited options.
5.) You’ve lately found yourself eying your grand-kid’s bedroom counting down the days until they move out. Reality check: Depending on your family’s culture, moving in with immediate family may be a reasonable option. However, if it’s not considered the “norm” within your own family or culture, you might want to have a sit-down discussion with those you intend to intrude upon share space with and make sure everyone is in agreement.
4.) Commune-style living is something you’ve wondered about, and are now thinking you’d like to try. Reality check: I don’t know much about commune-style living. Those words alone conjure up images of hippies growing their own food. Who knows, maybe it’s a great option for retirement!
3.) You plan to stay young forever. Reality check: Unless the fountain of youth has been found, chances are we are all going to get old sooner or later. As the saying goes, “It’s better than the alternative!”
2.) You’re still waiting for your ship to come in. Reality check: The ship’s not coming!
1.) Too many of my top ten signs are eerily hitting the nail on the head! Reality check: Like me, you’re running a bit behind. It doesn’t mean you can’t catch up or at least begin a solid plan towards your retirement. Start today or mark it down as a “to-do” on your calendar to start this year. The key to compound interest is TIME, something that begins to run sooner than you think!
Though many of my signs are very tongue-in-cheek, the bottom line is retirement planning needs to begin before retirement begins! I’ll be following up this post with my detailed plan in the next couple of months (keeping me accountable for my goals!)
Do you have a handle on your retirement? What advice would you give someone starting late?
I agree with the spirit of this post. Many people make false assumptions when it comes to being able to retire.
#2 above jumped out at me. I think there are, unfortunately, too many delusional people who anticipate some type of “windfall” to come crashing through the roof, right into their open arms. As you put it, the ship is not coming in! Better to save more while working on ones career/income streams. Also stay healthy. If you can’t work, you’ll have a tough time retiring!
@Squirrelers – #2 is a delusion, that’s for sure. My inspiration for that one are all the people I see consistently buying stacks of lotto tickets and scratchers. If they put their money in a CD or invested it into their retirement fund, they’d probably make out much better!
Very good post. Sounds like the summary is “I hope I get lucky”. My grandmother lived on a 160 acre sheep ranch and worked extremely hard. When my grandfather pased away she sold everything she owned and then stayed with each of her three daughters for part of the year and then moved on. While she was there they took trips and she always did what she could to chip in with the housekeeping. All had a room and welcomed her. I am so thankful for all that extra time I had with my grandmother so I’m glad you did the cross out on #5.
.-= Carol@inthetrenches´s last blog ..Living on One Income- How to Make it Work =-.
Very true, that ship is not coming in (most likely) if it hasn’t already!
I feel so-so prepared. He save the max we can. My focus is also on saving money that is not in a 401k so my husband can retire early. (Since 401ks cannot be touched until 59 1/2).
There is so much to save for between Retirement, college, emergency funds, etc! I don’t know that I will ever feel like I can sit back and say ‘ok, we are set now’. Maybe someday…
.-= Everyday Tips´s last blog ..Should A Family of Four Be Able to Live Off 111-000 Per Year =-.
@Carol – There are definitely benefits to multi-generational families. It’s good to hear you benefited from your grandmother staying with you. However, it shouldn’t be someone’s only retirement plan! And it definitely needs to be discussed as a family.
@Everyday Tips – There are a lot of things to save for, sometimes it seems overwhelming! However, retirement should be priority one or two. As for saving for kids’ college, there are lots of ways to fund college tuition, like grants, scholarships, and student loans. If you help your kid manage their student loan, they’ll learn some terrific budgeting and finance skills. Use it as a learning experience!
I can’t recall the survey exactly now, but there was a surprising huge number of people, I believe it was younger ages, that think they will either win the lottery or get a large inheritance to facilitate their retirement!
Talk about wishful thinking. We can’t just sit by and do nothing, we have to actually ACT and make things happen for ourselves!
Great post
.-= Jesse´s last blog ..My Final Weight Loss Competition Recap =-.
Very good post! We (me and my husband) are doing a lot of things wrong. He thinks he will never retire. Whenever I ask what if you are “forced” to, he says there will be something I could do… dream on… or he will talk about how our grandparents died relatively young, so he might too… so #2 & #3 really jumped out at me. I agree with camping too, last time we went, we paid $35 per night. If we didn’t really want to go camping, motels are looking attractive cost wise!
.-= Suba @ Wealth Informatics´s last blog ..Freshman Finances – Save money with cheap college textbooks =-.
What a great list! Some of your 10 really made me smile. Scary but funny all at the same time.
I don’t really see me retiring in the traditional sense. I would like to be employed (or self-employed) at least part time for quite a while!
Funny post! I like the list. All so true, perhaps!
I plan to retire before 45 and live it out like crazy!
.-= Financial Samurai´s last blog ..How To Get Girls If You Live At Home With Mom & Dad =-.
@Financial Samurai – The list is meant to be funny, but it’s also so true. I think it’s great you’re planning on retiring by 45. I think I’ll have to stick it out until my late 50′s at this point. But I’m fine with that for now. (though, we’ll see how I’m feeling come mid-50′s!)
@Money Reasons – I’m with you. The idea of a traditional retirement sounds really boring (I don’t golf and can’t imagine wanting to spend everyday playing bingo)! I think I’d always be doing something creative or that has value.
@Jesse – I think that’s called the idea of entitlement! A lot of younger people believe they deserve a large monetary reward or are delusional about how much money they’ll create in the future. It’s only once reality sinks in that people begin to change. (Maybe that was why I started so late!)
@Suba – I created the list out of real scenarios, either ones I’ve thought about (scary!), or heard from others. I’ve always been a dreamer, and dreamers have a hard time facing reality!
Mr. BFS and I feel like we’re doing fine (pension, 401k, a Roth IRA, and a Scottrade account for high dividend stocks). We’ll be fully funding another Roth IRA this year (probably won’t have it done until February though).
I’d suggest that anybody looking to save for retirement figure out a goal (we’re shooting for $2 million plus the pension) and then figure out how much they need to set aside to reach it (and I’d estimate using a 6% return overall in something like equities).
@Budgeting in the Fun Stuff – I like your goal. I’m pretty sure that if I plan accordingly, even with starting late, I’ll have a bit over $1 million (but that includes my pension!) and that’s only taking in a 5% return (I better shoot low since I’m starting so late). I do plan on generating income during retirement, so hopefully that will even out the late start.
@Little House
Yeah, if we continue to follow our hobby jobs in retirement, we may actually have more than we “need” but that is a problem I’m willing to have.
Funny post!
The sooner one starts saving for retirement, the easier it is to reach your retirement goals – both in terms of dollars and retirement date.
Best,
Len
Len Penzo dot Com
.-= Len Penzo´s last blog ..10 Ways to Get Fit for Little or No Money =-.
My grandparents, both in their mid 80′s are living #1 and LOVE IT. They have a small cabin up north in WI. Live there most of the year, take the RV to Arizona for January/February. They have taken the summer and driven to Alaska 3 times! This week they are in Eagle River, my grandpa drove the RV, my grandma drove the van pulling the boat for fishing. they love it, and it will take a serious illness to slow them down. My grandma has had both knees replaced and still hikes several miles every day.
@Rebecca – I’m all for living it up in retirement. Lately my husband has been eying those Airstream trailers and let me say they are really appealing (and expensive!) It’s good to hear your grandparents are really enjoying themselves RVing around the country. Good for them!
Hi Little House, I love 10 ten lists and this is a great one. I definitely see people I know in all of those. It’s true that you don’t know what life will throw at you. My father-in-law had a stroke in his late 50s and couldn’t work much after that. My mother-in-law was going to work forever but I’m glad she decided against it. My husband’s grandmother is 94 and she never dreamed she’d live that long, but at least she is very good with money.
.-= Jennifer Barry´s last blog ..Is College Worth It =-.
@Jennifer Barry – Thanks for sharing your “real life” experiences with me. I think that’s something people don’t think about; the fact that they may be forced to quit work earlier than expected OR that they’ll live much longer than they had planned. This makes starting retirement planning very risky (boy, am I in trouble!)