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Retirement Planning - Saving enough is not the only option
How many of you are trying to save money for your retirement thinking this is the only way to a secure and peaceful retirement? Have you ever wondered if you are doing the right thing? This question has nothing to do with how much you save per month or your annual interest rate or rate of return or any of the other myriad of confusing terms foisted on us by the financial sector in order to convince us that managing our own money is too much for us and we must have a ‘financial expert’ to tell us what to do with our money, and isn’t it interesting that the ONLY solution they tell you is to save money in their accounts and mutual funds?
‘How long are you going to live past your retirement date?’ – this is a pretty fundamental question to ask if your strategy is to ‘save enough money to retire’. Without knowing exactly how long you are going to live past retirement age how on earth can you hope to ‘save enough money’? How much is ‘enough money’? Do you know? Does anybody know? The number of years past retirement age you are going to live is a fundamental figure in the equation you are trying to work out. Without this figure, your calculations have no hope of being accurate so when are you going to have ‘enough money’?
The Problem with 'Saving Money'
Then there is inflation, which really makes this strategy of ‘saving enough money’ unsound in my opinion as inflation is completely outside the control of you, the one who is saving money. The money you save today will probably not be worth the same value come retirement. This also makes it impossible to determine even how much per month should be saved as you have no idea what your monthly expenses will even be once you retire as inflation will distort any figure you come up with today and you have no idea what the inflation rate will be between now and retirement.
So you see, because of inflation and because of the variable lifespan past retirement age it is impossible to determine exactly what ‘enough money’ is today. Buying gold or stocks is no better either as an ounce of gold bought for $1400 today and sold for $10,000 in 20 years is worthless if in 20 years $10,000 only buys you what $1400 will buy you today, you have not actually saved any REAL money.
‘Saving money’ is simply the wrong strategy for a planned retirement. I have lost count of the number of elderly security guards I have seen and met who are working simply because the pie-in-the-sky pensions they were sold on have fallen way short of meeting their needs in retirement. Is this why you are sacrificing 10% to 20% of your income every year? So you can become a security guard in order to make ends meet when you are elderly and ‘retired’? Lifetime enlisted military men should seriously ask themselves this question as a military pension is not what the military says it is when they recruit you and fully 50% of all the elderly security guards I have ever met or worked with are ex-military enlisted men trying to eek out a living on a minuscule pension and a minimum wage security job. Thanks for all the years of glorious service and sacrifice for your country guys.
The Government vs. Retirement
The Canadian government has recently introduced legislation that will raise the mandatory retirement age from 65 to 75. Why do you think they are doing this? The ‘reasons’ given by the government are that it is being done to accommodate all those who ‘want to work’ but if they are saying that access to the Canada Pension plan (that’s the government pension plan you have been paying into your entire life) is no longer available at 65 and now you must wait until 75 (and YES this is part of the legislation) then are they not, in effect, FORCING you to work ten years longer than your parents or grandparents had to work? If this legislation is being brought in to ‘accommodate those who wish to remain in the workforce’ then why push back accessibility to your Canada Pension Plan to 75 from 65? Obviously this is a government lie.
Why the lie? Easy, in my opinion, the two most politically active groups in any free western society are university students and the elderly. This is because, again in my opinion, these two groups have more time to pay attention to what the government is doing and to fight to hold them accountable than the rest of us who are forced into a 9 to 5 job every day of our life except the two days a week when all the government offices are closed and there is no one to listen to your concerns (The weekend). Ever wonder why the government and banks have the exact some holidays and working hours as you do? It is so there is no one there to take your calls when you finally do have the time to make that call.
In an effort to suppress those who hold the government truly accountable on a pretty much daily basis, these two groups have been specifically targeted. The students, with rising tuition and book costs and reductions in student loans (because of the ‘economy’ of course) has had the net effect of restricting access to higher education, thereby reducing the amount of educated people who are aware of the government and the lies and fabrications they foist on us. An educated and aware population is the greatest threat any government faces, especially in a democracy. The eldery are being targeted by increasing their working life so that most of them will be too worn out by the time they finally get to retire to speak out. Add to this average lifespan of a Human being is roughly 75 to 80 years and what do you see? Work until death.
This legislation can eliminate, completely, the educated and aware voices of the elderly.
So, you see, in the end this concept of ‘saving money’ will only ensure that you stay a wage slave for the rest of your natural life. Is this what God put you here for? To be a corporate wage slave for your entire adult life? Is this type of life really ‘all that you can be’?
So, what then
What is your 'retirement plan'?
So what else besides 'Saving'?
The number one problem in this world as far as we, as individuals looking to retire, should be concerned with is the amount of debt we are carrying. The more debt equals a higher degree of slavery. In order to retire, it is not so important to ‘save enough money’ as it is to remove the need for money from your life. In other words, a good retirement plan is to be debt free when you retire regardless of how much money you may or may not have saved. Mortgages, car loans, high interest credit cards, all must be eliminated before you retire if you want to be truly secure in your retirement years. It is pretty easy to see why these things need to be eliminated before retirement. Retirement does not pay as well as working does, I think that one should expect a 2/3 reduction in their monthly household income as soon as they retire. Your lifestyle had better be able to handle this impact don’t you think? Preferrably with a minimum amount of discomfort to you and your household. I would classify owning your own property mortgage free (because you own nothing as long as you owe a mortgage) as probably the single biggest piece of a secure retirement package you could have, followed closely by the elimination of all high interest debt, credits cards, lines of credit, etc.
We have covered the debt that most of us are familiar with but what about the debt that you may or may not even consider debt? I am of course referring to those recurring fees that we all have to pay in order to survive in the modern world. Things like electricity and water, heat, rent for those who do not own property, etc.
I cannot offer any suggestions to cover off the rent payment except to buy property. As long as you are renting you are living at the whim of the property owner, as long as you have a mortgage you live at the whim of the banks, owning your own chunk of the earth is more important to your retirement than saving any amount of money will be.
The other recurring fees can be easily eliminated if you live in a free country where you are allowed to pursue your own initiatives. Canada and the US are still such places although, in my opinion, many attempts to curtail our freedoms have been tried in the last 10 to 15 years and we must constantly be vigilant. Many, many cities and towns in this country of Canada and indeed around the world will not allow you to do what I am about to suggest so now would be a good time to remind you, the reader, of the benefit to owning rural property outside the jurisdictions of any municipality. This frees you to use your own initiatives in order to eliminate these recurring fees.
Electricity, electricity is the easiest thing in the world to generate yourself. Windmills can be made from items kicking around your junk closets and garages and sheds. Solar panels are relatively inexpensive to buy and easy to configure and the technology in this area is improving all the time. Not only would you eliminate the need to pay a electricity bill on a month to month basis but you may even be able to turn a little bit of a profit by selling your excess electricity back to the power company. How much do you spend on electricity month to month? Imagine if that total became $0.00. Or, better still, what if that monthly bill turned into a monthly check? Cities and towns will not allow you to live off their power grid for the most part.
As an added bonus, this approach to generating your own power is totally green. Consuming electricity does not generate green house gases, producing electricity does. All the power you will be consuming is 100% green power in the form of solar and wind, your carbon footprint is now almost 0.
Water, well you can always dig a well. (no pun intended) The trick here is to check your local taxation laws at the rural or county levels. Some counties in the United States for example will tax you extra if you have your own well. In my opinion, it is best to find someone who will drill for cash only and ‘forget’ the paperwork. That way you have a well that no one knows you have and so you can avoid the tax. If your conscience is tingling at this approach then ask yourself if it is fair to tax you extra because you dug a well on your own private property and no longer have to pay a water bill, because THAT is the sole purpose of such taxes, to discourage self-reliance.
Heat is a little more costly to handle in a self-reliant and expense free manner. If you generate enough electricity then you can use the excess to heat your home and kill two birds with one stone so to speak but generating enough for the added burden of heating the home as well as all your other electrical needs will increase the initial costs of setting up your own electrical grid considerably and leave you in a bad spot if you should suffer a grid failure in winter (at least in Canada).
If you have the money and the space geo-thermal heating is an excellent solution to this problem as this technology uses the Earth’s natural internal heat to heat your house. It requires a very large yard to setup and you will have to redo your landscaping once the installation is done, but it is well worth it as geothermal energy is free.
So, we have eliminated the mortgages, car loans, credit cards, lines of credit, electricity, water and now the heating bills. So what else do we need money for? Food. This is easy even if you have a relatively small yard. Growing a vegetable garden is not only far healthier in the long run than even buying ‘fresh’ vegetables from a market is, but it also very relaxing work for the most part and it will take a large chunk out of your food expense. Take some time to learn how to preserve your vegetables for longer shelf-life and storage capabilities. If you live in a rural area then try to locate the local beef farmers and see if you can buy beef and other meats directly from him rather than in the supermarkets. Basically, try to keep your food sources as local as you can. This will lessen your expenses. The average distance a meal purchased in the supermarket has traveled before it reaches your table is 1500 miles. How can anything be called ‘fresh’ after that? Healthier and cheaper and requires a fraction of the money.
Unless you are interested in becoming a HAM radio operator and all your family members are also HAM radio operators then getting rid of your phone bill is going to be a little trickier. I would try to get a VOIP (Voice Over Internet Protocol) phone. It is far cheaper to pay a internet bill than a phone bill especially in Canada where most of the provincial phone companies operate in a monopolistic marketplace (ie: they are the only choice) For maximum thrift I would also do away with any and all cable TV subscriptions as these are a waste of money and any television show you can think of is available for viewing free on the internet at any point after it’s initial release date, same with movies and all major media news outlets are also on the internet. Internet service is relatively cheap in comparison to digital cable and phone subscriptions.
In the End
If you do these things AND you save some money as well then you may have a retirement filled with travel to exotic places while secure in the knowledge that your home base is secure and waiting for your return and if you do these things and DO NOT save much money then at least you will be alive and healthy in the comfort of your own home pursuing your own initiatives and desires instead of looking forward to a lifetime of wage slavery. Think it over.
A word on Reverse Mortgages
In Canada we have had a product introduced to our elderly called the reverse mortgage. This is the process of borrowing money on your home’s equity without having to make payments until you move (or die). This is ludicrous as you’re sacrificing your children’s inheritance. If you do what is stated in the previous section to reduce or eliminate the need for money on a monthly basis then you will never need to do this type of deal.
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© 2012 Robin Olsen