Nov 19, 2010

Managing Retirement Savings...after retirement!

The Sun is always shining somewhere.  JamaicaImage by Always at Home via Flickr
WHAT THE EXPERT SAYS
I was reading an article published in U.S.News.com called "6 Easy Ways to Increase Retirement Saving".  We all know that saving, saving, saving is the best way to go.  The author of the article, Kimberly Palmer, had some good suggestions for saving even if you are a freelance or a student.  She also had suggestions on how to choose a low fee program that would save you thousands of dollars when it came time to cash the savings in.  I think you should take a look at her article.
OUR CHOICES FOR MANAGING RETIREMENT SAVINGS
My husband has reached the age when he must take part of that pre-taxed money we saved all those many years ago.  As we both know, we will pay the consequences/taxes now.  The question is:  Is the cup half empty or half full?  Even though we must pay more in taxes this year we are going to go with the half full plan.  For this first year at least we will spend some of the money on a 50th wedding anniversary trip.  We both know that using our savings for frivolous things is not a good idea.  However, in our case we do not live on our savings or income from our savings.  We will have a discussion for taking out IRA money will our stock broker and decide when to do it next year.  Trends in the market will help us make that decision.
USING COMMON SENSE WHEN MANAGING RETIREMENT SAVINGS
My husband does what Ms. Palmer suggested and saves even now.  We continue to set a goal for a trip or a new piece of furniture...the habits we formed as young people still serves us well.
Although Ms. Palmer did not mention it, I might also suggest that you invest in a vacation plan for the future!  If you do this, you will guarantee yourself some travel even if you retire with less than you expected.  We invested in a good solid time share type of plan.  In our case the time is not set for a week or a certain place.  We bought into a company that offers the whole line up of resorts and is very desirable in the timeshare exchange world. Using this retirement tool will make your "advanced" years a lot more fun.
We made most of that period of time between our children flying the nest and retirement.  We were both working and we saved like crazy using as much pre-taxed money as the law allowed.  My mother often said that saving for retirement was much easier during the post child rearing time.  Boy was she right.  We took advantage of that time and actually on many occasions saved until it hurt!  It was fun.  We used other strategies that also came to bear on what we have now.  There were things we did and did not do...
  • We did not buy a bigger house when the children left and we had more disposable cash. We did, however, make sure that the right amount of money was invested in real estate.  That has turned out to be very important.
  • We did not upgrade the car or even our furniture.  The life style remained very constant.
  • Our cars were bought when we needed them...the emphasis being on NEEDED!
  • While we did travel at least once a year we did not go nuts with it.  I know we could have afforded some really upscale travel at that time but we had a goal in mind.  We used business trips as vacation time even though one or both of us had to work.  We were educators so these were very modest trips.
  • Our children graduated from college with no debt so we did not need to continue to support them.  That sacrifice has paid off over and over!
  • We had our savings removed from our pay before taxes so we never saw the money.  
  • We invested in a variety of different types of mutual funds and stock for IRA savings.  You MUST find an investment counselor or stock broker you can trust,
  • When we retired, we decided to take our retirement in such a way that the surviving spouse would continue to get the income.  This frees our mind to enjoy the money we do use.
CONCLUSIONS
So, given our decisions both past and present, we are giving ourselves this one wonderful big and expensive vacation!  We will use that vacation investment in a timeshare I talked about earlier.  That frees up a lot for the frills that we always thought might be fun.  Oh, and I did spend a lot on clothes.  I don't know how we could have anymore fun than we have in the past but I will let you know.  It is nice to know that we gave ourselves the opportunity...we are very grateful.

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