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The Economics of Being a Cheap-o

How to retire without a huge pension and enjoy it.

by Jan R. Cooke

 

It got me thinking after I had been to one of the “Retire Wealthy” meetings, and had listened to speaker after speaker telling us we had to have X-hundreds of thousands of dollars in Savings, Investments and Retirement plans.

The ”experts” tell us that if you are currently earning $50,000.00 a year then you need to have something like half a million dollars in investments and retirement funds so that you can maintain your life style (some experts suggest as much as $1.3 million when future inflation is taken into consideration).  The benchmark they use is that your investments have to generate at least 80% of your pre-retirement income.

As I was listening to all this I was thinking to myself:

#1 That isn't going to happen, because at age 53 I don't have enough working years left, and even if I contributed every penny I made, I would still fall short, and what would we live on in the mean time?

#2 There has to be a lot of people that have never worked for a company or business that has a pension plan or, for whatever reason, have no retirement savings (75 million Americans work for companies with no retirement plan.  50% of American adults over 50 years of age do not have any retirement savings, with only 33% actively planning their retirement.  An astonishing 25% of all Americans have ZERO savings of any kind).

#3 There has to be a Plan B or C, or D, or something, that is actually workable.

The first thing I had to do was to see where their logic broke down.  It's right there - “maintain your lifestyle” - that is where it all comes apart.

I don't want that lifestyle.

What I want is my place in the country where I can strive to live in a sustainable manner and move toward being as self-sufficient as possible.  To have as few as possible living expenses and no debt.  NO Mortgage, NO Car Payment, NO Credit Card bills or Credit Card debt, and not having to work unless I want to or if it is too cold in the winter to do anything else so might as well earn a few extra bucks.


So, I sat down and started working out the numbers and putting together examples to show that, NO, you do not need a half million dollars, not even a quarter of a million, not even a hundred thousand bucks.  I set out to prove to myself and my wife, that if we kept doing the things we were doing, with some effort we could, over the next few years, rid ourselves of all debt, mortgage, power and natural gas bills, as well as a large part of the grocery bill. That I could, in fact, retire comfortably with only a small pension and without having to be a greeter at Wal-mart until I am 90.

So, now the question is, “What steps do we have to take to get to that point, and how is it all going to play out as we plan our retirement?”

   

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