Thursday, September 15, 2011

Live On Less and Love It-LIfe In The Fixed Income Zone

Congratulations to Bob over at a Satisfying Retirement for being part of an article in Money Magazine showing that you can live well on less.  Also thanks to Money Magazine for showing readers that you don't have to have a million saved to have a rewarding retirement life. In that theme, I thought I'd share some of the ups (and the few downs) of having a rewarding retirement on much, much less than Bob ( or many others).

First let me share my failings, at least briefly. I have no savings. Without going into specifics, I'll just say that between unemployment, grief at the loss of a husband, and supporting college students-what should have been the beginning of a nest egg (life insurance) is gone.  And because my husband and I spent many years living overseas, what should have been college and retirement fund money was spent on travel-regularly and often. While I regret the first circumstance, I regret the second not at all. As a result, I live on my husband's social security, a small government pension, and extra money that I bring in as a quilter. Put another way, my base salary (before part time income) is about $2500 a month.

Be assured, I am not starving. On the contrary, I have a full life.  Like every life, it has some ups and downs. I've made some major ajustments and I have many  more to make. But I'm not in the position of never leaving my house, eating cat food, or moving in with my kids (in fact, one still lives with me). My goal is to spend next summer in Europe, I take regular road trips.I've just returned to school.   As I shared earlier, recently I've been to the theater, and I go to movies regularly. I have many hobbies including quilting (which is by nature not cheap).  My natural tendency is to relax and smell the roses. So the question is, how do I manage, and what are my plans to continue to manage as I enter my sixties (sooner rather than late)r?

The positives of my life in the Frugally Fixed Income Zone:
  • I've decided what is important to me and what isn't. That means keeping a house with a mortage (and a garden, and space for a dog) but getting rid of the televison. It means traveling, but less often and comparing pri ces. It means cooking at home and saviing dining out for special occasions.
  • I have TIME. More importantly, I have time that I control. Some folks value time the most, some folks value money. In my case, if I can only get a pedicure twice a summer and have to do it myself the rest of the time, it's worth it to have the flexibilityand the freedom
  • Since time equals money, I'm able to cut expenses. No one cares if I take the entire fall to extend my flower beds and put down paving stones.  The extra time I have in retirement allows me to make my own gifts, cook leisurely meals, travel at my own pace instead of the requisite one week or weekend of vacation, shop sales, and take advantages of mid week discounts and freebies on entertainment.
  • I have no work expenses.  Almost any job requires commuting, a certain wardrobe. Many careers require entertaining, business literature, lunches out.  I've reverted to casual chic (which in my case means leggings or shorts, and nice tunics). 'Im well groomed, but I do it myself. I don't consider this a chore, for the most part.
  • I have most of what I will ever need. This is something that somehow all those pundits seem to ingnore when they figure retirement costs. Even after living overseas and having more things than I can count destroyed in the moves, I have a housefull of furniture, pots and pans, christmas items, books, a wardrobe, and all the so called necessities of life. In face, I probably have too many.  Will I need to replace items?  You bet.  Will there be things I want just to have them? Sure. But thats not the same as a real, regular need.
  • It's amazing how the little savings add up, and frankly (at least for me) how painless many of those little savings were.  While I may never be a gourmet cook, I've learned to cook mainly delicous meals, as well as how to cook frugally and healthily for two on a budget. Call it a creative challenge if you will.
  • I have a skill that allows me to make extra money while remaining in my own home. Admittedly, without out those extra few dollars, life would be much tougher.
  • I dont care what the Joneses think.  In the same vein, I have friends with varying levels of income, most of whom dont care about appearances in terms of lavishness.  Most of my social circle (for lack of a better phrase) would just as well have a dinner and bring a dish rather than to to a cocktail party.
  • I have good medical coverage. It seems only fair to mention this. I have yet to enter the medicare zone, but I have insurance through the federal government at a reasonable rate with a reasonable deductible and maximum
On the other side of the fixed income spectrum:
  • Although my monthly income pays my expenses, it doesnt account for emergencies (like the new evaporator coil for my air conditioning system).  This means that for awhile I need to be more intensive in earning and saving so that I can build up "savings" or an "emergency fund" in order to cover those unplanned expenses. the end result is that in addition to earned monies, gift moneies and any extra financial aid will be put into that pile.
  • I have a mortage.  In my case it's a choice, not a necessity. I could probably sell my house. But I'm a recent widow, still with college students (who have lost their dad and need a place to truly come home to in the truest sense).
  • I'm going to need to bring in some additional income, at least for a little while. I believe that amount will be around five hundred dollars, to have enough money to invest in savings for those expenses named above. Yes, I do it through a hobby that I love and in my own home, but neverthe less, it is "work". Again, once this savings has reached a certain level, my goal is to cut back and simply work when I please.
I hope that by sharing my ups, downs and experiences through this blog, retirees and would be retirees realize that its possible to have a rich life even on a limited retirement income.  Life is meant to be lived, after all.


  1. Barb,
    Thanks for this side of it. I'm always skeptical of the retirement calculators that say you need millions in retirement. I'm assuming they never want you to touch the principal?

    My MIL lives on 1200 a month, thanks to the loss of her husband's pension and her social security. It's really tough as she is now too old and set in her ways to consider leaving her 4 bedroom home that she's lived in for over 50 years. We help her out with major repairs, but I'm not sure how much longer we can do that.

    You are still very young, and I'm sure if you had to, you could go back to work. I like that you choose to live frugally, though. It gives us all hope that even if we don't save "millions" we will still be able to retire without resorting to eating catfood on crackers.

  2. Inspirational. And as always, well said.

  3. Sharon. I certainly could not live on 1200. I began receiving my husband's pension when he died (its a percentage because he was not at retirement age). I keep that and his health care plan (which I pay for). I will certainly probably be willing to leave this home at some point if I have to. If I cannot make about five hundred extra a month, I will look at that.but first I would look at elminating cable (which I have not-at all...........cant fgure out how to watch sports thru netflix and hulu) and making other cuts. I would work part time, but never full time again baring ...My house was built in 1999, and obviously needs repairs but is not falling down around my head. mY ext post today or tomorrwo will be on do it yourself landscaping...

  4. Always inspirational …well written and makes me feel OK, I was forced kinda to take my retirement it’s about the same as yours ..but our house is paid for and no car payments ..our health care costs a lot but hope to do better at the first of the year….we are enjoying life or as I tell everyone “the best two years so far of 60 ” ronaldj

  5. Barb,
    Thanks so much for this post! I am considering retiring from teaching after this year. However, I have had visions of poverty when I think of what my pension will be. I was a stay at home mom for many years and we always managed on my husbands moderate income. I guess I should just step out in faith.

  6. Thanks everyone. My only regret is that I did not have the sense to give myself some moderate savings/income for emergencies-Other than that I feel confident,and I will get there


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