Retirement will Come.

Sooner or later, if you live long enough, you will reach retirement age.  Then what??  Will you be able to retire or will you need to put off retirement until you can afford it.  Or worse yet - will you ever be able to retire?

In March I will be 53 and my husband will turn 54 in April.  We are just a little over a decade away from retirement.  If you think that 13 years from now is a long way off, all you have to do is think about what was happening in your life 13 years ago and then you will realize how quickly time passes by.

I have realized over the past few years that financial decisions I make today can really affect me for a lifetime.  If I purchase a new car, for example, I will pay $25,000 to $30,000 for that vehicle having to finance all but a downpayment.  Yes, the vehicle is new and that is always fun, but what if I bought a used vehicle for less than $10,000?  Even if I financed it for 2 or 3 years, I would still come out ahead than if I purchased the newer vehicle.  The difference is money in the bank or money in our retirement account.  

We plan on living in this house through our retirement.  The house will be paid for before we retire.  Two scenarios we played with is that perhaps we would sell this house and buy a two bedroom, ranch style home to live in during our retirement years.  We would do this only if the selling of our home and the buying of a smaller home would be a wash financially.  The other scenario is that we would side this house for low maintenance.  Siding our house would cost quite a bit of money.  Is it worth it?  We're not so sure.  It would be less costly to hire someone to paint the house every 5 years than to pay for siding. 

Again - it's about money in the bank and in our retirement account. 

What about the picket fence?  Should we replace the wooden picket fence with one of those vinyl kind?  Would it be worth a few thousand dollars for a low maintenance vinyl type of fence?  We decided, no.  We can still pay someone to paint it every few years and we will still come out better than paying for a vinyl type of fencing.

When we purchased a new refrigerator last summer we bought one that is a basic model - no frills.  This means that if we want chilled water, we have to keep a pitcher in the fridge.  If we want ice cubes, we have to refill the ice cube tray.  The result is a savings of around $600. 

I have always thought that it is the little things that add up to big savings, but I have started to think about where to save on the big ticket items.  It is easy to be lulled into believing that vinyl siding and vinyl fencing is a necessity when it really isn't.  When we go into retirement we will only need 1 car and a good used car will meet our needs.  Appliances with all the whistles and bells are nice, but I rarely use all the features of an appliance.  I find that filling my own ice cube tray and emptying the contents into a ziplock freezer bag is just as easy to use as an automatic ice maker. 

Saving $20 a week on groceries adds up to $3,120 over the next 13 years.  What seems like a small amount adds up to quite a bit of money over time.  That is how we need to view saving and living frugally.  We also need to live like there will be a tomorrow and make a plan for retirement.  Not talking about it because you are afraid is not a plan. Make it a priority to think about your retirement when it comes to spending your money today. 

One thing that we have learned over the past 5 years is that you must plan for your future and not live beyond your means.  Retirement will come and we must be prepared.