How to Better Prepare for the Financial Side of Retirement

Since starting Retirement-Only the Beginning I have focused on the non-financial side of planning for retirement. I discovered early on there was an awful lot of attention and effort focused on getting the money side of the equation right while relatively little was dedicated to answering the all-important question “what will I do in retirement?” It is all well and good to find yourself able to afford to retire but what will you do once you get there? My blog has tried to do the best to share ideas and real life suggestions that may shed light on ways to better prepare the way to make the most of your new found freedom.

That said the financial side of preparing for retirement cannot be ignored. Before we can make the move we have to know we will be able to support the lifestyle we hope to live. Even after we retire we still need to stay on top of our game. We should not just invest and forget or we may find ourselves in a less than ideal situation down the road. As I live my second act rarely a day goes by that I do not read of some new challenge retirees are facing.

Health care costs scare the heck out of me. For the first time since we have been members of the working world my wife and I have to pay for our own health insurance. A bit ago I started researching Obamacare to get an idea of what to expect. But it was early in the game and there were still a lot of moving parts. What I did learn was that it would not be cheap to provide the level of coverage we would need as we aged. For the next three years we have the option to buy COBRA which gives us the same coverage we have always had (medical, dental, vision). It is not cheap but it is a necessity. What scares me is what our options will be when we can no longer extend COBRA. And what will is cost.

Investing in the right areas is and will remain ever challenging. Is it best to focus on growth or value, bonds or stocks, mutual funds or ETFs, and what about the latest investment vehicles to hit the streets? How are we supposed to keep it all straight? For we retirees one of the scariest thing is if we make a mistake we do not have the luxury of time to put things right. I try to educate myself as best I can. I picked up an online course on fundamentals of investing to better understand the terminology and concepts behind the financial markets. I subscribe to the Wall Street Journal (something I never did while I was working) to get a better business slant on world events. I have been listening in on various webinars offered by investment companies to better educate myself. These webinars have been quite helpful covering a variety of topics addressed by experts in the subject matter. I am signed up for what should be an interesting session hosted by Liberty Bank titled 6 Retirement Planning Mistakes to Avoid as I continue my ongoing education.

Are there other retirement traps I should look out for?

I read about the importance of long term care insurance to provide for us should we at some point become unable to care for ourselves. But the costs are significant and I worry about the viability of a company 20 years from now when I might need the money. Is it worth it? Do I need it?

Social security will be a significant part of our retirement as long as it is still there. Even if the program remains in place when is the best time for me to start collecting benefits? Too early and I risk what could be bigger checks if I live longer than the average.

The list goes on and no one seems to have all the answers. So we continue onward doing our best to make informed decisions and exposing ourselves to the least possible risk we can to achieve the returns we desire. It is a perpetual balancing act. Fortunately there are a lot of smart people to help us out. And thankfully I have come to realize I am never too old to learn something new.

If you have any favorite websites or links to information that may help the rest of us navigate the retirement jungle, feel free to share.  :)

What’s Really Important

Last weekend we shared a nice afternoon with my sister and the folks enjoying their new bocce ball court and a bottle or two of Octoberfest appropriate beer. As is usually the case it was great to catch up on everything from the kids to current jobs (for those of us still working) to vacation plans. As we were sitting down for dinner we heard on the news of a fire rapidly blazing its way through hundreds of acres down Monterey way. Since we now reside in that area we were concerned, even more so when we learned the flames were a mere ten miles from our home. We continued monitoring the news worrying through the evening and headed out early the next day.

As we neared the turnoff to our home we had to skirt the lines of a second fire that lined both sides of the road and was supposedly 80 percent contained. Firemen and trucks were scattered everywhere with blackened hills filling the landscape that 24 hours earlier had been brown. Fortunately these hard working public servants fought the good fight and were on top of the situation allowing us to make it safely home. Once there we tuned into the local news for the latest on what was being called the Tassajara fire. We were a bit frustrated to find no updates to the situation since many hours ago. Although we could not see smoke we could smell it.

Beatrice and I decided we would put together a few boxes of our most important records and possessions in case we might have to make a run for it should the fire spread to our doorstep. We found a few plastic containers left over from our recent move and began wandering the house in search of those most important and irreplaceable possessions.

What were we going to include in these precious few boxes? With a limit to what we could pack into the cars, which items did we consider to be most irreplaceable, sentimental and significant? Looking back now it was an interesting exercise. At the time, not so much.

We agreed there were certain documents we needed to save – deed to the house, pink slips, receipts from the sale of the house, birth certificates, tax records for the past years, and insurance information.

Next we focused on a few valuable pieces of art we have and figured we could get them into the car relatively easily – just a few paintings and one Peter Lik photo that we bought on our honeymoon.

Even with these minimal selections we were running out of available space. What else was most important to save? When it came down to it the material side of things was surprisingly unimportant. Neither of us was concerned over electronics or furniture that although good quality could be replaced. The real loss for us would be the beautiful spot where we were planning to spend the rest of our lives. This perfect location would not be so perfect should we have to rebuild amidst blackened ruins. For me it came down to a short list: photos of the family collected over the years – there are no negatives and these could not be replaced; my laptop; and one particularly unique vase with a chameleon climbing the side that although not valuable is pretty cool.

In the end we collected everything in three plastic bins and were ready to grab the three pictures off the walls to make our dash to safety. Thankfully the fire was contained and our immediate neighborhood is no worse for the wear.

Since the threat of the fire we have scanned all of our important documents onto a hard drive and thumb drive. We have opened a safety deposit box where we store these along with some irreplaceable pictures and family heirlooms. We now keep an empty plastic container next to the safe to throw the contents into short order should the need arise. Most importantly we appreciate even more what we have and how fortunate we are to be where we are. We witnessed in those poor people who lost their homes just how fragile and uncertain the future can be. Taking life for granted is a mistake. You are only as safe as your next disaster. We feel prepared to make a hasty retreat should we have to. But in the meantime we are enjoying the moment and making the best of each day together.