Monday, June 20, 2011

Fixed Income Living-Positioning Ourselves For Retirement

Recently I’ve begun to take steps to position myself for a successful life on my fixed income. Positioning is an important part of planning for our retirement lives. It’s especially important when income is restricted, be it in retirement or another time. Positioning allows us to plan our lives so that we get the greatest reward with (hopefully) the smallest expenditure.

After spending too much time on auto pilot, I’ve decided that I may never have another “real job” at this point in life –although I do anticipate income streams. I’ll be truly living alone (for the first time) soon as my college student leaves home. All this means that among other things I’ve been crunching numbers, evaluating circumstances and deciding what I want to do “when I grow up”. As I look to turn sixty, I will begin to receive my husband’s social security benefits. Until now, I have been living on drained, almost gone savings and a very small pension. While my income will still be limited, it will be regular and allow me to make plans and have a base budget from which to work.

For me at least, these positioning decisions involve many areas of my life. The main decisions to be made for me (and for most folks, I expect) are financial, with housing being a primary consideration. After all, housing costs are usually the biggest part of our budgets, and home is where retirees and the unemployed spend a large amount of their time. Within that housing umbrella fall housing costs, the makeup of the abode itself, and the location. All are part of the same whole, and everyone has different needs.

As I said before, housing costs are a large part of the budget, and keeping them in control and reasonable allows us more disposable income in other areas. Some of us do that by downsizing, some by having paid off our mortgages early, others use other methods. In my case, I have a mortgage

Equally important is the house itself. Do we want to have to worry about getting up and down the stairs later on? Is it too big to clean? Do we have raking and shoveling and mowing taking up all our time? Will family be visiting often? Maybe we have hobbies that require space. My current home is a single level, fairly new house in a low cost of living area. Right now those things are important to me. Others may choose to have no yard, or live in a place where all of that is handled by an association.

General location counts for a great deal, both in terms of climate and convenience. Do we need to be near an airport so that family can visit? How important is climate in our decision. What kind of environment to we prefer. Do we want all folks our age, or live with a variety of ages, cultures and ethnicity? Are we willing to drive for basic services, or do we want them right around the corner.

After some time, I’ve come to a two tiered answer to many of these questions. Eventually I will want to do some serious downsizing both for financial and physical reasons. In the immediate future, I have decided to position myself in my current house, mortgage and all. Why? Well, I have a large down payment tied up and cannot afford to sell for less than I paid-a fact of our economy which cannot be ignored. More importantly, I love my house, and it has many money saving advantages. Being ten years old, most of the improvements on my list are more cosmetic than structural, and can be made at my time frame, when I can afford it. This house has a single, open plan which makes circulation easy. It’s also situated in a part of the country whine screens and fans are sufficient for many months. The house is in a fairly low cost of living area, and allows me space to garden, have two space intensive businesses, and raise large dogs. The only paid assistance I need is occasional help with the yard. While it’s far from my family in Denver, the cost of living difference allows me to travel there for a few weeks about four times a year.

My choice is not perfect. It means I’ll have to make some bigger cuts in other areas (good bye, cable my friend). It may mean that I have to make larger expenditures temporarily to make this house work and run more cheaply in the long run (I’ve been considering a whole house fan but was unsure if I was staying). It means that I will be a day and a half trip from my only relatives other than my children, rather than living in the same town. On the other hand, I’ve chosen a place with a low cost of living, many conveniences, and where shoveling snow (or hiring someone else to shovel it) is not a requirement.

Even as I’ve made positioning decisions now, I’ve looked ahead to the next phase of my life. I’m unsure when that phase will arrive, but at least I’m aware of it and what’s kind of decision are required. What about you. Will you stay where you are? Would you prefer to move, to downsize, or perhaps just to improve your climate? Is downsizing where you want to go? Is the housing market such that you can make the choice you want? How are you making these decisions work for you?

4 comments:

  1. We moved from our home in So Cal last year to Prescott, AZ. We knew for financial reasons downsizing made sense. Also, in our early 60's now was a good time to 'start over.' I'm glad we moved into a smaller house, but I do miss some of the storage I had before. We looked all over the world, but ended up moving a couple of hours from our grandchildren.

    I think you make many good points in your blog. There a many considerations, but I love the creative options BB are coming up with for housing.

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  2. Cathy it will surely make sense for me to downsize eventually...if and when I can sell this for what its worth.v and when I can be sure where I want to end up finally

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  3. We made a careful decision a few years ago and moved to a smaller house in a friendly small town, halfway between the large cities where our daughters and their families live. We have an acre, so there was room for me to begin putting in extensive vegetable gardens, moving toward realizing my dream of growing a lot of the food we eat. However, life dealt my plans a blow, and I realize that old saw about "the best laid plans" might be coming true. I have a recently diagnosed autoimmune disorder that makes it difficult for me to drive many days, much less garden. Would an even smaller city place near one of our daughters, a home near ready public transportation and little yard work be better? For now, my hates-to-garden husband is taking over many of my former tasks and escorts me around, but what if he can't do so in the future? We thought we had taken care of the aging-in-place perspective when we chose a single-story house with wide hallways and doorways into the bathrooms, with caring neighbors who all help each other out. We thought wrong. We're reevaluating.

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  4. Linda, it can be a difficult decison. In my case, i alrady know that my yard work ability is limited (killer knees that will not get better, ever) My gardening is mainly done in pots with some raised beds, I can mow the middle of the yard if I have to, but I have to hire for trimming, edging and weeding.

    Its always hard, although I know I want to be "in" rather than "out" when it comes to population areas.

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