Friday, August 17, 2012

Initial Retirement Planning

August 17, 2012

In case you just started following my blog, I'm at the point where I was a few years from retirement and I was looking at the possibilities.  Was retirement even possible?  How long could I keep working?  Could I keep a good paying job, even as my age started approaching 70?

So, looking at my probable income and expenses after I retire, I knew my largest outlay would be rent and utilities. Since I no longer owned a house (after my divorce), I started looking for alternative housing.  While the housing market was definitely a buyers market, with housing prices and mortgage rates at the lowest in decades, the cost of a home was still a substantial investment.  The mortgage payment (PITI, with principle, interest, property taxes and insurance) would still be greater than most monthly apartment rents in the area.  Besides, it would take 30 years to pay off my house (if I made standard payments), and property tax, in one form or another, was always on the rise.  And I had to face the reality that I probably wouldn't have 30 years to pay off that mortgage.

Rentals on the other hand, tend to increase each year, too.  So, even though I could find a small one-bedroom for about $500 a month, in 20 years, that could be $1000 a month...or more.  And I doubted Social Security was going to double the amount it paid out.  Now, while I have some money in two 401K's and an IRA, I didn't want to pay it all towards housing costs.

Like most Americans approaching retirement, I was looking at an uncertain financial income, even though I supposedly have saved more towards my retirement than most of my fellow boomers.  And, there was one other aspect of retirement that I wanted to avoid.  I watched my parents sitting at home after their retirement.  They didn't socialize very often, never traveled, and lost touch with their friends and family.  Without a job, my father didn't have much left in his life; and my mother lost interest in most outside activities.  And they had something I didn't...each other.  Facing retirement as a single person, I knew I would have to have goals, things to look forward to, and some sort of social activity.  Bars are okay, but I had already learned that as you age, that night of fun at the bar costs more and more the morning after.

With all these problems swirling around in my head, I began to look for solutions.  I spent most of my life in the computer field and if I learned nothing else, I learned how to solve problems.  I also learned that time is money and money is time.  If you wait until the last minute to start working on a problem, chances are it will cost you a lot more money than if you start working on it early.  You have time to look at various alternatives, time to reflect on these alternatives, and time to occasionally walk away from the problem and think about something else.  This last one keeps your sanity.

So, five years before the time I intended to retire, I started looking for alternative housing for my retirement.  I considered small condos, apartments, those little box homes, even rooms available for rent in private homes.  One weekend, when I was looking for something to do, the radio mentioned that there was an RV Show in our area.  And besides travel trailers, motorhomes, and tons of accessories, it was also supposed to have food vendors like a county fair.  Some crispy fries and a funnel cake started sounding good, so I headed out to the show.  After all, it was only 5 dollars entrance fee and was right next to Hersheypark.

Yep, I stumbled into the largest RV Show in the nation...and it was in my own backyard.  I drove up to Hershey, paid my 5 bucks, and walked into a world I didn't even know existed.  As I walked through, perhaps, my 30th RV, I casually mentioned to one of the sales reps (she was cute and I wanted to talk to that, "Gee, I could live in one of these".  And she told me about something called fulltiming and a national RV club called Escapees.  I left that show munching on more than my funnel cake.

I got home, slept on this new information, and Sunday became a day of Googling.  I read about the types of RV's, the various RV clubs, the cost of spaces in RV parks...and I started forming a new plan for retirement.  A plan that addressed (but didn't necessarily solve) all of my concerns about retirement.  I had a new plan for retirement.  It was just an outline...a germ of an idea...but I began to see some real possibilities.  And I liked what I saw.

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