Prepping for Retirement

[patience]

There's gotta be a PAW story in this whole thing.

Someone on a financial forum asked what Baby Boomers are doing to plan for their retirement. He didn't get any great revelations in the responses, but did get some humor, such as "Putting all mine in Greek Bonds-I'm gonna be RICH!". This is a serious problem for millions of folks now. Here is my response.
_______________
A leading-edge Boomer here, age 65. Our first retirement strategy is toast:
-No debt. (Still none.)
-GM pension from engineering job. (BK)
-Other auto industry company pension (BK)
-Social Security (FWIW)
-Wife's smaller pension (Census Bureau/VA)
-Very small savings, due to heavy financial/job loss problems

Those don't look so good/don't exist now. We had fallback plans, to wit:
-Low cost area/live cheap/homesteading & self reliance things. (This is on track.)
-Grow savings/investments. (Did pretty well thanks to Tickerforum.org and other advice, but nowhere nearly enough.)
-Hedge rising prices with "Alpha Strategy" (Buy ahead to avoid inflated prices. This worked very well.)
-Home-based very small business, machine shop/farm repair work. (This depends on my continued good health and physical abilities. Closed for now, expecting govt. to abuse small businesses, and to give me time to work on more self reliance.)

Our last-ditch thing was to buy the mortgage on our kid's off grid homestead, and buy a cheap RV trailer to park there. Working on that setup now. This is for when any reason makes it impossible for us to stay at our place.

Bottom line:
-We are dependent on SS and wife's govt. pension, which pays our insurance. On Medicare. If/when the .Gov goes bust, so do we, and we will have to:
A) Make it on what we can earn at home in a busted economy.
B) Give that up and move to the kid's place, hoping we can pool our meager incomes and stay alive.

We are screwed, and don't have a better idea. We DO know how to be poor, having lots of experience at it.

With about $20K in SS/yr., we live cheap enough to save half that, but have no idea what to do with it beyond:
-Bought a little junk silver at $13 and considering selling it now and put that into steel stock/supplies for the repair shop.
-Buy ahead what goods will keep forever and we will USE.
-Stay in cash to avoid market pitfalls, not being investment savvy.

All constructive ideas are welcome. Groan.

Yes, we have been lifelong savers and always lived below our means. No, we didn't lose our butts in the crash of '08, it was legal troubles long ago that caused our savings to be so small now. With advice from Tickerforum.org and others we actually about doubled our money in '08 and '09 with our savings.

We are in a farming area, produce about 50% of our food, have our own water supply, heat with a woodstove, and don't need to buy any clothing or consumer goods to speak of. I do all our home, car and other repairs. Wife cuts my hair,cans food, cooks from scratch, keeps our finances straight, and sews, and I can do about anything with tools. (Machinist/made furniture/farmed and logged with horses/hunted/fished/trapped and all that sort of thing. Working on solar PV.

Don't have a clue what we could have done any better, so let's hear some ideas.
______________

No responses from the financial guys yet. Anybody here have some good ideas?

[patience]

Here's the scenario I expect.

Italy collapses, Greece defaults, Germany leaves the EU, Portugal collapses, Italy defaults, French banks fail, UK banks fail, US banks fail (Goldman Sachs, JPM, etc.), world credit crisis followed by printing money/currency devaluations everywhere. Us is unable to borrow and more money for its' 47%+ deficit budget and either:
A) Prints money with great abandon and probaby goes to war with whoever (pick one), or,
B) Defaults on everything--bonds, SS/Medicare/Medicaid/Govt. pensions/Military pensions, Govt. contracts, Federal aid to everybody, etc.

That means everybody is as broke as a sailor on his 3rd day of shore leave, and with a (debt) hangover to match.

So, how does one live through that? I want to see a PAW story about this. Might have to write one if nobody else jumps on it. But I want OTHER people's ideas here, if at all possible. My brain is fried trying to come up with answers. The scenario very quickly goes to personal suffering, social disorder, and general chaos, IMHO.

[Jerry D Young]

I had a pretty good start on my retirement, with years left to continue to contribute. But when I became ill that all changed. Bankrupt, disabled, living on Social Security Disability. Things can change in a hurry. I'd do it rather different now if I was to have the income to do it with.

[patience]

Yeah, things can REALLY change in hurry. Boy, have I ever had that happen. Since I don't get a do-over I suppose it's moot, but yes, if I had the chance there are a lot of things I'd do differently. I shouda kept the farm and put a LOT more money into silver.

But what I meant was, without knowing where it was all going, I did the best I knew.

[missbala]

I'm 76 retired and still prepping. Live on less than $10,000 per year S.S. Rent my apartment in sunny Clearwater, Fl. Able to pay rent , electric, internet and lifeline phone. I buy in bulk at Sam's Club and vacuum repackage into smaller sized containers, buy meats when on sale and can in meal size jars, get frozen veggies and dehydrate than vacuum seal in mason jars. I have a fair supply of pasta, rice, instant potato and powder milk, not instant milk. Make my own laundry, dish and bar soaps, bake bread and biscuits. Yes, and I also cook everything from scratch, no fast foods or package foods for me. I do a lot of cook once and eat for a week, freezing the leftovers as vacuum sealed TV dinners. I am Blessed with good health, NO medications what so ever at this time. Oh, and all my food is purchased on $75. a month with food stamps.

Just letting you know you can live cheap if you plan ahead, and just purchase what you need when you need it.

[patience]

missbala,

Your success is quite an accomplishment! We do a lot of the same things as you. We grow a serious garden, have 6 hens in a small coop in the back yard, and have some fruit trees on our one acre lot. Canning season is hectic around here.

Since I have the welding and machine shop, I built us a wood stove ($165 for materials) rather than pay 10X that for a commercial unit. Firewood is cheap here, in very rural southern Indiana, and sometimes I get some free from friends who do storm cleanup.

So far, my prediction above isn't very far off reality. It now looks like Japan may be the next to go down, and the currency wars--competitive devaluation of currencies--is in full swing. This week Japan announced it had to devalue the Yen, and the G7, or G20, or whatever is trying to make it sound like that is a good idea.

Devaluing your currency ("printing" too much money) is a ploy to make your exports cheaper to other countries, hoping that will create jobs. But it makes your own people poorer in terms of what they can buy on the world market. Long term, everybody gets poorer.

I have seen this coming, but there is little we can do to protect ourselves from it. Devaluation makes our savings and income worth a lot less. Our best stratey has been to put a little money into things that PRODUCE for us, like the gardens, orchard, and workshop. Next best is things that SAVE on future expenditures like the wood stove, clotheslines, and buying things ahead that we know we will need, like clothing, maintenance stuff for the house, and more efficient appliances.

But when push comes to shove, we will still be poor like verybody else.

[rvm45]

About becoming Disabled and Forced Retirement...

I'm 56 years old.

I've lived with the goal of creating Revolvers from Barstock for many years.

{Contrary to what many think, Revolvers are far harder to make in Home Workshop or even a Home Machine Shop than a Semi-Auto...}

I also have/had a bad tendency to Procrastinate and Throw Money Away.

Back about 2000 I promised myself that the next time I had a job, that I would work hard at getting Lathe and Mill.

In 2003 I had a job again. "Tool and Die Making" would have been my first choice, but it wasn't offered locally.

I decided to go to "Vo-Tech" to get a degree in "Industrial Maintenance".

I figured that I could pick up skills and that with the greater income once I graduated, I'd get my Lathe and Mill sooner.

I got to take Drafting, Print Reading, two semesters of Machining (all they offered) and several semesters worth of Welding...

And lost my job in the meantime.

Just about the time that I really started the job search in Earnest, my health went down the toilet.

I'm disabled.

I have very little feeling in my feet {Neuropathy} even if all my other problems would vanish, I'll never be able to worK all day on my feet in a factory again.

Hey Diddle-Diddle!

I've been drawing SS Disability for about three years now.

Something like $1050/month. After they take out insurance, I'm left with $950/month.

That just keeps me fed and housed.

I have a Ruger Redhawk in .45 Colt—4" Barrel and Stag Grips.

It was one luxury that I allowed myself when I got my backpay.

I have half a box of Ammo for it and no holster.

I may never get any more ammo or a Holster for it.

I thought that I'd have a little spare cash month to month, or I would certainly have made sure to get me a reloading set-up when I had the back-pay.

Now the Knob-Gobblers are trying to Garnish my Social Security on account of my student loan.

Skew the lot of them!

I guess they need the money worse than me.

Don't worry though, they have to leave me at least $750/Month Gross, to live on!!!

So like Jerry says...


.....RVM45

[mnn2300]

As long as DW and I stay healthy, I am planning on retiring in 10 years -- assuming my job lasts the long. That will put me at 67 which would be full retirement, which would be almost double what I would get if I retired at 62. By then I want the house paid for and 2 new(er) vehicles - we're on track for both. We both have IRA's and 401k's with a decent amount in them assuming the market don't drop.
Plans are to sell the house in Dallas, move back to Orlando (where we started our marriage) and buy a townhouse/condo and try to stay active.

[musketuser]

My IRA's went IR away when things tanked. at 48 looks like I work till I drop. then work some more.

[patience]

musketuser.

You will have plenty of company working. Myself and many others will be just like you.

[papaof2]

Our biggest piece of 'prepping' for retirement was buying a house (now paid for) that will still work for us in another 20 years. The master bedroom and bath are on the main level with the kitchen and laundry. There's just one step up from the garage to the main level.

The house is mostly brick (bullet resistant for small calibers) and there's a space in the basement that serves as a satisfactory tornado shelter (we're not in Tornado Alley, but we do get some).

There are two fireplaces (main level and basement) but no wood burning stove or insert (yet). I have a kerosene heater that saw extensive use earlier this year when the controller board in the high-tech, high efficiency gas furnace died and the repair guy's "we can get one in 5 days" turned into two weeks. There's about 25 gallons of kero in the lawn equipment shed, most of it in 2.5 gallon containers (small, easy to store, light enough for my wife to move). The kero also works in the lamps and lanterns we have. Also have a couple of 'olive oil' lamps (actually, any vegetable oil and possibly some of the lighter solid shortenings - but the solid stuff may not smell all that good). Stored fuel for generators and/or vehicles is whatever is in the tanks (vehicles usually refilled at the 1/2 mark) plus 10-14 gallons in three containers in the lawn equipment shed (5 gallon containers are the biggest I can reasonably handle).

There's space for a 25x40 garden, but it would need a privacy fence as the area is next to the street. I do have heirloom seeds in a small fridge in the basement. Still watching Craig's list for something that would work for a fence and not get me in trouble with my better half. We're in an unincorporated area and there are no community association rules, so I can erect just about any fence that I can afford. Turning the soil with the little tiller I have (gotten solely to work my wife's flower beds) would take a long time but would be faster and easier than picks, shovels and rakes.

When I retired (early) I had the option of the company retirement plan or a lump sum payout. I took the lump sum, found a hungry financial advisor (willing to meet me at a place and time convenient for me instead of at his office as all the others did). The IRA took a hit in 2000 (dot com bust) which wasn't good, but we were both working and not taking from it (I'd been called back to my former company as a contractor, my wife was still teaching at the preschool). I had to take SS at 62 to handle the note on the new house when the previous house stayed on the market months longer than we anticipated (one of those "gotcha's" that happen). The 2007-2008 hit hurt more (especially with me in for back surgery in 2008) and we reduced the monthly draw from the IRA by 20% (and it's still at that level). Considering everything, we'll be OK if inflation continues at its current rate - we'll just eat simpler and have fewer perks (skip the once a week eating out, no more $7 per half gallon Brownie Rocky Road ice cream).

We are getting by on SS plus IRA, but don't have nearly the amount of supplies I'd like to have (10 years of everything sounds like a comfortable place to be and we are a L-O-N-G way from that). I do have an alternate water source available, having put in several rain barrels in 2007 when there was a 'no outdoor watering except food gardens' edict. There's a 250 gallon tank that can be connected to the overflow of a barrel (cleaner water - no sediment - at the overflow than from the faucet at the bottom of the barrel). I have several methods of making the water potable.

Current insurance (Medicare plus the company sponsored retiree supplement) is good. Surgery for prostate cancer last year (plus hospital time for some complications) was about $67,000 of which we paid less than $2000. In an SHTF situation, the testing that discovered the cancer probably wouldn't be available, let alone the 'minimally invasive' surgery to remove it.

Other than my technical skills* or the rental of my tools, I don't have much to earn a living with if everything goes down the tubes. *Mostly computer, some mechanical - having rebuilt or repaired just about everything on a car but an automatic transmission, some woodworking, household DIY - enclosing a carport (including the electrical work - yes, I had a permit and the work passed on the first inspection) and a little plumbing. At this point, I'd probably be of more use as an advisor or teacher than as a hands-on worker.