Planning for retirement should be an ongoing process until the day you are officially retired.  The economy the past couple of years have changed how some of us view retirement incuding yours truly.  According to the Wall Street Journal phased retirements plans are becoming more common.

A phased retirement is an alternative to regular employment that abruptly ends with a full-time life of leisure.  It’s a slower transition to full retirement that can be handled a variety of ways.  The time period can be defined or open-ended depending on the company.

Options

1. More Paid Time Off.  One couple in the article are still full time their last few years of work but took a pay cut for 5 more weeks of vacation each year.  This option would meet the needs of people that retire to do more traveling. 

2. Part time/job sharing. Shifting to fewer hours is another option.  The company benefits by not losing all the knowledge in one fell swoop and has an opportunity to transition the job from one person to another. 

3. Per Diem/Contract. Work on an as-needed or project by project basis for your previous employer.  This benefits the company because you already know the people and processes. 

Benefits

In addition to the reward of easing out of a full time life, there are financial benefits to this type of retirement plan.

1. Social Security.  The longer you can hold off on collecting Social Security benefits the bigger the check up until age 70. 

2. Benefits.  Depending on which type of phased retirement the employee can continue to earn paid vacation and other benefits including medical insurance.

3. Continued savings.  Easing into retirement gives retirees more time to build up retirement accounts that may have been greatly reduced due to negative stock market performance during the recession.

Summary

Phased retirement sounds like a great option to me.  When I’m close to that stage it will be something I’ll discuss with my employer.  Does a phased retirement appeal to you? 

photo credit: The Rocketeer

Content © Bucksomeboomer  2009-2010. All Rights Reserved.

Remember the commercials  for a financial services company showing people walking around with various numbers?  The number was the amount of money needed for retirement.  It varied by person, but of course the company could help you get to your number.

I didn’t think much about it at the time other than the fact that they’re trying to sell you something (and of course that it would be silly for people to walk around with a number over their head).

A recent discussion with friends about how much we needed to save for retirement brought it to mind.  How can you plan for retirement without knowing how much you need to save? 

Retirement Calculators

The company that is used for my work 401K has a retirement calculator.  I would guess most financial service companies offer one.  They pretty much work the same. 

Enter pertinent demographics, current savings, planned savings and it calculators your shortage or overage you’ll have when your estimated lifespan ends.

The problem is that the estimated income required to live on doesn’t seem realistic.  I don’t believe I will need as much money in retirement as most calculators state.  A better number to calculate required income would be to use amount of money required for expenses each month versus income.  If I don’t spend all I earn, why would that the starting point of figuring out what I need for retirement?

Rethink Expenses

Many expenses are eliminated once you are no longer working.  401K contributions, commuting expenses, and professional expenses will be eliminated. 

Will your housing costs change upon retirement?  We plan to change our housing situation (link to previous post).  No matter what we do, the mortgage will be eliminated before retirement so that expense will be gone. 

Will there be new or increased expenses?  Health care expenses will probably increase due to higher utilization.  Many retirees spend more time traveling (at least initially) now that pesky work is no longer an impediment.

 Number, Number

You need to know your number for reliable retirement planning.  My number is $450,000.  So, what’s your number?

Content © Bucksomeboomer  2009-2010. All Rights Reserved

I don’t want to get to Dave Ramsey’s step 7 just to acquire money. The point of money is to be able to do the things Mr. Boomer and I want to and live comfortably the rest of our lives.

You might remember  the movie “The Bucket List” a couple of years ago when two dying gentlemen make a list of things they want to do before dying.  Steve @ Brip Blap published his bucket list last week which got me thinking.

The three main things on my bucket list are loving and enjoying my family, giving generously and  traveling.  I’ve been to all 50 states and Mexico and Canada (check North America off the list).  Courtesy of cruising Mr. Boomer and I have been to many caribbean countries and territiories as well as some Central American countries.

My mother took my sister and I on a trip to England, Ireland, Scotland and Wales a few years ago.  I’d love to go back, but there are many places I haven’t been to that are on my list of top places to see before I die.

1. Italy.  The first country we probably will visit once we start tackling this bucket list is Italy.  The cities on my list are Rome, Florence, Venice and Naples.  So many sights to see and experience. 

2. Japan. Mr. Boomer is not excited about this one because he doesn’t care for Japanese food.  I think there’s enough Western food there to get us through.  Japan is on the list for sentimental reasons as well as cultural.  My older son’s daughter lives there as it is her mother’s home country.  So when she’s old enough to remember us hopefully we can go spend time with her and enjoy the country.

3. Tahiti. Hawaii is Mr. Boomer’s favorite vacation spot so far.  I think Tahiti may match and exceed it.  Pristine beaches, friendly people and warm weather sound irresistible!

4. Australia.  The land down under is not much smaller than the United States, but a lot less populated with an estimated 22 million people. Other than the great distance, this would an easier place to visit because of the common language and somewhat similar history of colonization (okay the convicts are more exciting than the pilgrims!).

5. South America. This time I’m not picking a specific country (let alone city).  We’d like to visit so many places in this continent including Brazil, Peru, Chile and  Cape Horn.  This might be one of the first places we hit on our bucket list since mass market cruising makes it more affordable and less intimidating.

There are many more places and sights Mr. Boomer and I hope to visit before we can no longer travel, but this will get us started.  Do you have a bucket list?  Is travel one of your priorities?

Photo by Nino Barbieri 

Content © Bucksomeboomer  2009. All Rights Reserved.

 Last week was Veteran’s Day and one of the Veteran’s offers I listed was free admission to Knotts Berry Farm for Veterans and one guest through November 26th.  Mr. Boomer and I are taking advantage of the offer this weekend. I’m not a thrills ride person but Mr. Boomer loves it! We’ll have fun just doing something different.

It was a different week in other ways at well.  My company honored employees that are military veterans with a company-wide dessert hour Wednesday.  Even though we have roughly equal gender numbers there were more female veterans this year than male.  That was a first! 

I had a guest post published and some readers did pop over to check out other articles.   Lastly, I had an over 50 test that involves preparation.  Thankfully that is only repeated every 5 years.  Enough said about that!  On to the excellent articles I read this week.

Editor’s Picks

 1. The Day I Killed my Credit Card.  Brad @ Enemy of Debt brings the battle against credit card debt to life with his tale.  Even though I think credit cards are a necessary evil for several reasons (this is one of those things where I don’t agree totally with Dave Ramsey) it’s a fun read. 

2. The Best of Procrastination Quotes – Share Yours. I don’t have a good quote, but I share this bad habit with Ray @ Financial Highway so found this post fun to read. Can you believe he came up with 31?

3. 3 Things a Day. Going hand in hand with the above article, FB @ Fabulously Broke helps procrastinators break through the barrier with a system to check off at least 3 items a day.

4. Paycheck Error: Our Emergency Fund in Action. Would you be able to escape financially unscathed if a digit was dropped from your paycheck? Aryn @ Sound Money Matters illustrates the importance of a well-funded emergency fund.

5. The Presentation Secrets of Steve Jobs.Lynn Truong @ Wise Bread gives us four secrets of why Steve Jobs is an excellent presenter. One thing that’s no longer secret is that it involves work — even if you’re Steve Jobs.

6. Affordable College Towns for Retirement.I’ve discussed that relocation is a possibility when Mr. Boomer and I retire. GoTo @ Go To Retirement discusses housing affordability in the college town arena.

Carnivals

Festival of Frugality #203 – American Flag Edition @ Domestic Cents
Carnival of Money Stories – My Money Flaws Edition @ Gather Little by Little

Content © Bucksomeboomer  2009. All Rights Reserved.

Did you know that last week was the National Save for Retirement week?  No? Me neither.  Congress had designated October 18-24, 2009 for the purposes of raising public awareness of retirement plans available to them and increase their knowledge of personal finance.

Those objectives need to occur but one week a year isn’t going to make it happen.  Over half of all US workers have $25,000 or less saved for retirement.  The good news is that it’s not too late.  People can learn about retirement planning 52 weeks a year.

The link above for the National Save for Retirement week website includes many resources to help people learn and plan.  Use calculators to estimate life expectancy, savings requirement, estimated social security benefits and estimated retirement expenses.  All of this knowledge is essential to retirement planning.

Take advantage of retirement saving plans at work whether it be a 401K, 403B or other tax code number.  If you don’t see the money, you don’t miss it.  If you do contribute plan on increasing the percentage of your pay contributing with each pay raise. 

A bonus for people over 50 (like yours truly)  is the ability to make catch-up contributions.  This means most baby boomers can contribute an additional $5,000 per year once maximum contribution has been reached.  

Do you participate in a retirement savings plan?  If you don’t and have the opportunity please start planning for your retirement.

Content © Bucksomeboomer  2009.  All Rights Reserved.

Andy Miller @ Wallet Pop recently wrote about dealing with a dying father without a living will. His story brought tears to my eyes for more than one reason.  Yes, I felt sympathy and empathy for Mr. Miller and his family. I also was remembering what my siblings and I went through six years ago with our own father.  Losing a parent is very hard; but battling to lose that parent is even harder.

If anyone should have put advanced directives in place it was my dad.  He had small cell lung cancer which has an extremely low survival rate and a median life expectancy of 18-24 months after diagnosis.  Dad, who had quite smoking 7 years earlier after a stroke, fought it with chemotherapy, radiation and his spirit.  Despite the dire diagnosis my father did not write a legal will or health care directives.

My stepmother called us when dad went into the intensive care unit and was put on a ventilator.  His lungs were giving out on him due to the cancer and, ironically, the treatment damage.  Three of us traveled from out of state.  When the last one arrived, my dad awoke for the final time and signaled he wanted the ventilator removed.  He was just waiting to see us one last time.

Over the next couple of days, doctors advised my stepmother there was nothing that could be done for dad medically and recommended he be removed from the ventilator.  His four children agreed with this recommendation.  My stepmother would not even consider removing the ventilator. 

In trying to honor our father’s wishes there were multiple (sometimes intense) discussions with his wife.  We could not understand why she would want dad to continue suffering when there was no hope.  You see the problem was..she truly believed he would get well.  

A week later, we were preparing to go home as our families and employers needed us and there was no change.  The doctors called a meeting that included my stepmother, my calm sister, my uncle and other hospital personnel.  They somehow convinced her to remove the ventilator and Dad passed away peacefully a couple of hours later. 

Fortunately,  our relationship with our stepmother was not too damaged and we banded together to plan the funeral and bury dad.  But the bad memories persist.  One document could have changed the experience for my father and the rest of the family. 

Now, do I have a living will?  Not yet but I am committing to get this done by the end of the year.  What about you?
Photo by Bucksome Boomer

Content © Bucksomeboomer  2009.  All Rights Reserved.

President Barack Obama was selected to be awarded the Nobel Peace Prize this week.  Whether you voted for him or not, was it not a proud moment for our country?  Evenings were filled with major league baseball playoffs and Jim and Pam’s wedding (The Office). 

Miss M @ M is for Moneyis celebrating the blog’s first birthday. Sometimes I feel so late in the blogging world but then someone like Miss M inspires me as proof it is possible to be successful without having blogged for five years or more.  Happy birthday and to many more.  I really enjoy your writing!
 

Editor’s Picks

1.  Saving Money is not Hard! Miss M points out that despite what advertisers may try to convince you, saving money is not mission impossible.  You just have to make this payment to yourself a budget line item and stick to it.

2. That Makes me Stabby: Gifts=Love.Other than the fact that I didn’t understand the meaning of the word “stabby”, this article by Aryn @ Sound Money Matters is relevant as we prepare for the holidays. As we plan to downsize gifts this season it’s important to understand that the true value of a gift is not the price but rather the thought, care and meaning behind it. Oh, stabby means very bad mood or crazy mad.

3. 4 Estate Planning Documents You Need Today. Jill @ Moolanomy reminds us of the importance of putting your ducks in a row with a will, durable power of attorney, health care proxy and living will. Mr. Boomer and I planned to do this several months ago but neglected the task. Don’t follow our example!

4. How to Read Your Social Security Statement. Do you know what the annual pre-birthday social security statement means? Jim Wang @ Bargaineering explains how to read the estimated benefits, earnings and how to identify red flags.

5. We’re Ignorant Idiots! Tell Us Why A Flat Tax is Not Fair.I don’t think anyone will argue that the current tax system is easy, fair or even a good system. Financial Samurai makes the case for a flat tax in the U.S.   A close runner-up on this site is the article on controlling spending for the month of September.

Carnivals

 Carnival of Everything About Personal Finance 12th Edition @ Nil2Million.com

Content © Bucksomeboomer  2009. All Rights Reserved.

The regular baseball season ends today and this coming week will be the start of postseason play.  My beloved Padres were not a promising team this year and they held up to that prediction.  But the wonderful thing about baseball is that hope springs eternal for next season!

My week was busy at work and home after returning from vacation.  To add to the usual post-vacation catch-up I will be traveling all week for business starting today so I had pre-trip preparation.  Oh well, it makes life interesting.  On to the week’s reading and carnivals!

Editor’s Picks

1.  Why (and How) You Need To Review Your Credit Card Statement. A few months ago, I had difficulty getting a credit from Amazon.com for returned merchandise (due to an inaccurate address).  Despite being told multiple times, I would have a credit somehow it never happened.  I disputed the charge with American Express and was successful in getting a refund.  

Based on my own experience, I think you should read this article by Craig Ford @ Moolanomy Personal Finance which includes the importance of reviewing credit card statements and how to handle inaccurate transactions.

2. Dealing with the Recession. This past week I wrote about my family’s fallout from the recession. I thought this post by Living Almost Large was a good overall look at how people have dealt with the recession in general.  She also has a post this past week on joining accounts which is something Mr. Boomer and I will probably due before I retire.

3.  101 Ways to Give. Giving is a topic I’ll write about later this month. Craig @ Money Help for Christians offers 101 ideas on how to give of your money, time and talents.  It made me look at giving as not having to be big to make a difference.  You may find you give more already than you knew!

4. 5 Ways to Win the Race to Retirement.Having walked a marathon in the past I appreciated the analogy of the journey to retirement as to running (or walking) a marathon. Jtopp@ Redeeming Riches writes about this longer journey and how to stay on track.

5. Retirement Planning and Social Securitycountdown.  I had to include this article by Mr. GoTo @ Go To Retirement (after all Retirement is part of this blog’s title).  Of note is the five milestones on the social security timeline.  I’ve hit the first one!
 

Carnivals

I participated in the Baby Boomer’s U.S. (The Blog) Carnival for the first time.  This is a blog dedicated to all things baby boomer.

Baby Boomers Blog Carnival Seventh Edition/ @ Baby Boomer’s U.S. (The Blog)
Festival of Frugality 197th Edition @ Funny About Money

Content © Bucksomeboomer  2009. All Rights Reserved.

Related Posts:
Week in Review: Key West Edition
Week in Review: Frugal Week Edition
Week in Review: NFL Edition

I just returned from a “girls only” vacation with my sisters and mother and we spent some time in Key West.  It was a first time visit for all of us and I don’t think it will be the last.  Between the trolley tour and a stop at Sloppy Joe’s we found some sandals at a great price at Kino Sandals.  Just $12 for leather uppers and they’re very comfortable.

Another treat from this stop was a taste of key lime pie.  I’m not a fan of citrus-flavored desserts, but enjoyed the slice of pie from the Blond Giraffe Key Lime Pie Factory.

I spent yesterday catching up and compiled this list of recommended reading.

Editors Picks

1. 15 Signs You’re in Financial Denial. Review this list by Wojciech Kulick @ Fiscal Fizzle and see if you exhibit any of these signs of financial denial. I recognized lots of people I know and have at times experienced some myself.

2. On Your Next Vacation Save Hundreds Of Dollars On Your Car Rental By Finding And Stacking Discounts. A couple of weeks ago I listed several ways we cut vacation expenses for the girls trip. Peter at Bible Money Matters adds more detail on saving on rental car expenses.

3. How To Be Married A Decade And Stay Madly In Love. Greg Hayes @ On Simplicity points out 10 tips on staying in love after many years of marriage. Mr. Boomer and I have been married 14 years and practice many of these still.

4. Test your Basic Social Security Knowledge. Do you really know as much about social security as you think you do? Mr. GoTo @ Go To Retirement tests your knowledge with four important questions.

5. 51 Unusual Money-Saving Tips from Readers. Paul Michael @ Wise Bread gives us this list of some good, some different and some plain old wacky ways to save money. Saving old hair for pillow stuffing… need I say more?

Carnivals

Carnival of Money Stories – The Lessons in Stories @ M is for Money
Money Hacks Carnival #83 @ Cash Money Life (Editor’s Pick)
Carnival of Financial Planning – Edition #108 @ The Skilled Investor

Content © Bucksomeboomer  2009. All Rights Reserved.

Related Posts:
Week in Review: Frugal Week Edition
Week in Review: NFL Edition
Week in Review: Labor Day Edition

Baby boomers had parents or  grandparents that lived through the great depression which for many, if not most, had a lifelong effect on their behavior.  In general we scoffed at their frugality and made fun of penny-pinching.  Why save the little amount of leftovers after meals?  There’s plenty of food to have a new meal tomorrow.  Why wash out plastic bags and reuse them?  A box of new sandwich bags is in the pantry or at the store.

This recession may have some of the effect that the depression had on our parents and grandparents. Research by AlixPartners indicates there will be a more frugal normal after this recession ends.  The main reason is that my generation (love that Who song, but I digress) drove the spending boom of the last two decades and we’re in or heading to retirement.  We need to SAVE, SAVE, SAVE.

We’re busy paying off debt, dealing with loss of income and if we’re lucky and not dealing with the that, then beefing up our retirement accounts.  In fact, consumers cut debt a record $21.6 billion in July according to the Federal Reserve.  We only have about $2 1/2 trillion to go! 

Between the severe cutback in credit availability, cutbacks in personal spending and a general unwillingness to take on the risk of new debt Americans are paying off debt and saving more and we might not return to our old ways.  Post-recession spending is projected to return to about 86% of the pre-recession level.

Personally, I feel fortunate to have a job that provides technological solutions to the health care industry.  Health care is a segment of our economy that hasn’t had severe cutbacks.  However, I’ve had friends and family lose their jobs or have reduced hours.  In the back of my mind, I fear that it could be me.  Just like others, we’ve tightened our belts as the importance of being debt-free is apparent.

So like others I count my blessings, spend less, save more and pray for those less fortunate.  What changes have you made as a result of this recession?  Will you return to your previous ways or are some changes long-lasting?

Content © Bucksomeboomer  2009.  All Rights Reserved.

Related Posts:
None