What do you plan to do...

**peanut** · 12-14-2006, 11:50 AM

to prepare for retirement?

I'm Canadian, so I don't really have to worry much about health care. It's basically free here, unless you want to use alternative health, which I will. So I'm drawing up proposed budgets that allow for that. Plus I notice the big thing that caught Mom and Dad when they retired was the increase in cost of their drugs and dental work. They weren't covered by work anymore. So I think I'd set aside money for that.

The other thing I'd be concerned about is that I go into retirement in a fuel efficient new car. One that would last me 15-20 years...about as long as I should be driving anyways!

And I'd want to be sure I was in a home that I could afford, that suited my needs and ability to care for. If dh doesn't want to care for a house and do yard work, then I'd be looking at condos pretty sharply. Means I'd have to consider the fees and taxes, which are higher than owning our own home.

Anything else you'd prepare for?

**Bethany** · 12-14-2006, 12:20 PM

Good idea to think of these things.
We are paying our mortgage down early (should be done by the time we're 50.)
We are contributing to my 403b (work sponsored retirement.)
My husband works for a company that offers a great pension with healthcare benefits at retirement.
We are also simplifying our lives in order to not rack up anymore debt and we are paying off all debt.
We are never buying large, expensive vehicles again. We are commiting ourselves to smaller, more fuel efficient cars.

**suzysaver** · 12-14-2006, 01:21 PM

Last month I started contributing 25% of my paycheck to my 401k plan, may have over done it a little, things have been really tight lately..I think will adjust and I can always change it if I have to. I really hadn't thought about the vehicles...thanks for bringing that one up. Are cars are both really old, hopefully after getting this cc debit down we can start saving for something reliable for the future. I do wonder about some of the sahm..s, and what they are doing to ensure a financial future?

**staceyy** · 12-14-2006, 02:46 PM

We are contributing to our 401k, and hopefully social security will be around in another 10 years. We will pay off our home. I am learning every thing I can about frugality in an attempt to make retirement easier. I'm about to learn vegetable gardening and stockpiling will help. If things get tight, we could always downsize, as our home is large, or we could get a reverse mortgage. I'm not sure if dh's employer covers healthcare after retirement, I'll have to look into that. I was laid off last year and haven't found suitable work since, I may be retired now. I'm 55 years old.

**my4littlebuffaloes** · 12-14-2006, 06:55 PM

Well, we are young still. But we do not contribut to SS. Dh is a teacher and we contribute to a teacher retirement program instead. Between us and the school around 21% of our salary goes into it each year. In June of this year I also started contributing $100 a month into an IRA for me. I have a small retirement acct from when I worked and dh has a couple of old accts as well. We are no where near where we should be. But we are doing all we can. I hope to up my contributions to my IRA in the future, but right now we can't.

We also need to think about college for our kids. We have 4 kids and have never saved anything for them. That is something we want to start soon. We know that we could never pay for everything, but we would like to be able to help. It just seems there is never enough money to save for everything that will need to be fixed or replaced in the future. The roof and furnace of this house are 15-20 years old. dh's car is 11 years old. We want to pay cash for all of this, but need to start saving now, so the college stuff is on hold. I try not to think about it.

**lottaLove** · 12-14-2006, 07:03 PM

When I start my job in May, I'll be contributing 6% of my income to my pension fund. The company matches me dollar for dollar on the first 6%, so I figure I may as well do as much as I can as early as I can. We will also be contributing to an RRSP, because this is the money we will use to make a down payment on our home. We will contribute as much to this as we can without having to pay taxes on it.

**favesis37** · 12-14-2006, 07:40 PM

dh has a 401k, not much in it now or we would take it and take the penalties. i have nothing, i better get to it, at my age, retirement is coming fast. lol

**peanut** · 12-15-2006, 12:13 AM

I didn't cover pensions. Dh gets a work pension and a federal government pension (like the US Social Security). I get the federal government pension. We also have RRSPs (retirement funds).

I would be in a tough spot if dh passed away. I'll be okay if he dies while he's still working. He's covered for $250,000. And after he's retired he still has $100,000 until he's 75. But if he dies any older than 75, insurance will be gone and I'll be living on a pittance.

The firmest figures I can get from dh (and I don't think a lot of serious looking into this has happened!) is his pension is 65% of his working wage averaged over the last 5 years of work. If he dies it drops to 65% of that for a spousal survival rate.

Right now our take home is around $35,000cdn. We are living off 2/3 of that. So the drop to retirement should be affordable. But when he dies, the resulting drop will mean a drastic change in lifestyle for me.

At that point I'll be poor enough to qualify for low income supplements from the Canadian government. But it will be rough if I need long term care, which it looks like I will. So I'm seriously looking at my hobbies and writing to bring in some cash along the way.

**danni** · 12-15-2006, 02:37 PM

We have RRSPs for dh and me and we put $200/mth into them. In 2 yrs everyhing will be paid off and all extra will be going into the RRSPs.

**banana** · 12-15-2006, 02:44 PM

Dh has a thrift savings plan, he is a federal employee. He contributes 7% and they match for I think the first 5%. He will get a pension with an option to continue our healthcare but we would have to pay a big chunk of the premium. He so wants to retire at 56 which is when he will have 30 years in. He has another 16 years to go but I am not sure we will be able to afford for him to do that. I will be getting a small pension from when I worked at a hospital. I am hoping that SS will be around when we retire, dh is 40 I am 38.

**rosebron** · 12-15-2006, 11:54 PM

We've been working toward retirement planning for a while even though our careers got started relatively late compared to most of our friends. We have always had a financial planner who has been spectacular in helping us to plan our future; he's never tried to sell us products.

At his first steady job, DH contributed 10% of his gross pay toward his 401K for about 6 years. We rolled it into an IRA when he switched jobs. His current job offers a pension and he contributes about 2% pre-tax pay: this pension is based on number of years that you contribute to the pension fund.
When I met DH, he had a house in the northeast which he sold about 4 years ago. He invested the proceeds from the sale for retirement. He also saves a small amount each week in a 457 government investment plan, similar to a 401K.

The salary from my first job after university was pitiful and so was my retirement fund. I was so frustrated with the meager savings that I decided to squeeze some of my salary to start investing in a Roth IRA each year. As soon as I switched my job, I rolled over the 401K into a traditional IRA. Once I started earning a better salary, I started saving even more aggressively, increasing my 401K contributions with every salary increase (and also saving for childrens' college). My company also offers a mandatory pension and matches 5% contribution with 9.75%.

We've also invested in several small single family houses in the 1990's and hope that they will either create an income stream for reitrement or appreciate in value so that we can sell.

We are aggressively working on getting rid of debts so that we can pay off the mortgage in 4-6 years.
That should help kick-start our retirement savings.

**dcompton** · 12-16-2006, 11:09 PM

Retirement is scary. I am totally on my own and until the last few years have not really been in a position to put anything much toward it. I will probably have to work as long as I am physically able -- a depressing thought.

I work for the state, and we do not pay social security in this job -- we have an 8% mandatory contribution, the facility puts in what it would pay for SS, nothing more -- except for jobs much higher on the totem pole than mine. Finally last year I started contributing extra, but stopped when health issues began in August. I plan to pay off the CC's (one by the end December, the other ASAP), build the EF to 6 months, which I feel is a necessity (a year would be better, but I'll start with that) and then start putting the additional into retirement again. I will have a small social security from work before this job, but my years in the convent really messed that up -- only the bare minimum was paid in, and my job between that and this was low salary, so I won't get much return on it.

I rent, and will continue to do so. I know it sounds like money down the drain, but rents are not awful here, and in most apartments you pay only electric/gas -- though that could change. Still, I think I will be as well off as having a house with taxes, higher utility bills, and upkeep. Also I am not physically able (and definitely not inclined!) to care for a yard, so that would be another expense. I hope I don't regret that decision. Also, after I check out, some friend would be stuck with having to deal with the house, since there is no family to do it.

Medical is a concern. I have wonderful insurance now, but, as many of you have said, it goes with the job. And like someone else said, I have friends who are retired and they are in shock over how much they have to pay for medical, both for health care and for medications. That is always the wild card, as it were -- totally unpredictable. And we won't even mention the cost of funerals!

Then there is always Plan B -- die young! It's certainly more cost effective, but not our call....

**nwmissourigal** · 12-17-2006, 12:28 AM

Because my dh is self employed and always has been, we have had to be savers. We have so CD's and an investment account that we started when my folks both passed on and left us some money. I work outside the home and I just changed jobs about 7 months ago and can't invest in the 401k until I have been there a year. But I will contribute the maxium. Our plan all these years has been to always pay ourselves first. It is amazing how your money can add up over the years. That is how we have started out cds. I am hoping that next year we can open an Roth fund...we will see. We also pay extra on the house and will have it paid for very soon. That will be a relief...