Every retirees nightmare, whether they have $5million dollars or $50thousand dollars or $5thousand dollars or just five bucks in savings has the same exact fear: running out of money in retirement. I have to say I am guilty of living this nightmare too. My spending sprees, at times, have caused me to worry about my future. In retrospect, I know I spend too much money but I can justify each and every penny spent. Nonetheless, if I keep up with my own spending pace, there’s a possibility I too may run out of money in my retirement.
I track all my income and outgo so I am well aware of what goes on in my life. Doesn’t mean I’m going to change or anything. Eventually my reality sets in and I do change. I do compromise. So, maybe there’s hope for me yet.
I read this article yesterday (click here) “Retirement Savings Looking A Little Light? Here’s How To Have The Last Laugh” addressing the same exact fears I (and everyone else) faces in retirement. What makes this article so special and different from all the others, however, is that it offers a solution to the ‘running out of money in retirement’ syndrome. All is not lost. If you’re in your late 50’s or early 60’s and have come to the conclusion you haven’t saved enough for retirement, you’re looking at your retirement all wrong.
The author, Margaret Manning writes: “Fortunately, just after my 60th birthday, I had a conversation with my son and his wife that changed my life. They reminded me that it’s not how much you have saved that counts… it’s how much income you have each month!”
Once DH and I officially retire in three years, we will be receiving more money in our retirement than we were lately earning. So much so, that if our expenses remain the same (except for COLA and some surprises) I’ll be able to save some money in a savings account rather than the other way around. The keyword here is: keeping expenses the same. Knowing me, and my husband’s greatest fear about me is, once extra money starts rolling in, I’ll find those justified excuses to spend the money. I’m still dreaming about going on a Greek Isles cruise and rambling through Barcelona. Plus we need a new bed and I’d like a new, larger, wireless smart screen TV in the living room and….and….and…
See what I mean?
I’m my worst enemy. The good part is that I know I am my worst enemy and I’ve taken steps to curtail myself. I’ve locked so much of our money away in investments that can’t be liquidated or withdrawn as a drastic means of controlling my spending habits. One of the main reasons why hubby won’t sell our marital abide is because he knows I’ll come up with justifiable (there’s that word again) reasons why I should spend, spend, spend.
The other part of Margaret Manning’s ‘running out of money in retirement’ syndrome solution is to hustle and have a side job bringing in the extra cash you need. Before you actually retire, Manning recommends starting a side business, while you are still working. Doing so has several benefits. First, the money that you make from your side venture can go into savings, helping you to make up for lost time. Second, and just as important, starting a side business gives you the opportunity to build a revenue generating venture that will follow you into retirement.
DH is doing fine in this department. Me? I just lost my side hustling job. Granted it was only $100 a month, but that was an additional $1200 a year in extra income. I’m debating if I should or if I even could get another side hustle. I need ideas and that’s where Margaret Manning and her website ‘Sixty and Me‘ (click here) will come in handy. Manning is starting a conversation filled with ideas and suggestions for a side job hustle just perfect for women over the age of fifty.
In the interim, trying to get me to curtail my spending will be a challenge. I think I spend my money on needs rather than wants BUT what’s a need vs a want in my book? Certainly not the same as in your book, for sure. I’ve spent a lot of money this past month on new winter clothes. Last time I bought winter clothes was back in 2005. (See how I justify my spending?) I also bought everything on sale or closeout. (Another one of my justifications) It just got to a point in my life where I was tired of shopping secondhand or at thrift shops (another spending justification) and I wanted new clothes so that I could stay warm this winter, as it would be my first winter back up north, in four years (another one of my famous justifications)
My greatest weaknesses are live entertainment (I bought 5 tickets for my kids and us to see The Rockettes in NYC Christmas Show $305, 4 tickets for us, my sister and her hubby to see David Foster at the Van Wezel Performing Arts Center $248) and travel. I’ve booked state parks vs RV resorts in Florida for 6 weeks this winter @$856 , booked a trip to Las Vegas and The Grand Canyon @$401 cash plus points this early spring and Bermuda next spring @$550 plus points) Throw in every once in a while I like to dine at a nice restaurant; I like to get my hair professionally cut vs bargain chain salons and you can see my spending tally rise. Do I want to live or do I want to exist?
The real question I should be asking myself is: Do you want to continue to live in your home or do you want to live in your daughters basement? If I don’t get hold of myself OR make arrangements to bring in more cash, I may find myself knocking on my daughters front door sometime in the distant future. The greatest path to self healing is acknowledgement. I know I have a spending problem (or do I?) The next step is for me to take control of it.
Manning’s parting words: Starting a business before retirement allows you to take control of your life. Instead of asking someone else for a job, you can create your own. You will be the master of your own destiny – and isn’t that really the main point of retirement?