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The Retiree Next Door success strategies

How to Retire Successfully; 14 Tips From The Retiree Next Door

Inspiration from The Retiree Next Door; Surprising Secrets of Successful Retirees

Who doesn’t like to get a little recognition once in awhile? Being called a “social influencer” about made my day. (In spite of the fact I’m in the company of 69 other “social influencers”.) Here’s the message I received,  

“On behalf of MoneyTips principal Michael Dubrow and FinCon founder Philip Taylor, I am very excited to welcome you & more than 70 of your fellow bloggers/ vloggers/ podcasters and social influencers to the Retiree Next Door social movement.
 
We’re aiming to make some BIG waves when we launch the movement next Thursday, September 18.”

The Retiree Next Door

So, what is the “Retiree Next Door” movement? In spite of the tongue in cheek opening, this initiative is designed to raise awareness of “successful retirement” and provide evidence of strategies and lifestyle choices which can make your retirement rewarding. The Retiree Next Door is culled from research of 500 successful retirees and includes demographics, lifestyle before retirement, current retirement strategies, and more.

This movement rang deep for me. In addition to the fact that I’m staring down the barrel of retirement myself, a large majority of letters I receive from my readers ask retirement questions. Many of those queries revolve around the question, “What should I do if I haven’t saved enough for retirement?”

As an eternal optimist, one who’s met her retirement goals, and a committed financial educator, I am excited about the information for you in The Retiree Next Door (Free through September 30, 2014). I highly encourage you to pick up this information and use it to motivate and educate yourself about retiring successfully.

The Retiree Next Door success strategies

 

 

14 Ways Retirees Prevent Running Out of Money

In your 40’s or 50’s many of you come to the realization that in spite of your best efforts, you’re getting old. As much as you might want to remain vital and productive, at some point, either through choice, necessity, or a bit of both, you’ll need to retire. This article dives into the strategies that successful retirees practice to remain productive and solvent.

Most of these ideas also also hold water for those looking to build a nest egg for retirement.

1. Carry Medicare-According to the survey, 73% of the the participants listed this decision as a way to stay financially secure during retirement. Of course it’s a no brainer to participate in the U.S. government healthcare system when eligible. And with the new Affordable Care Act, all American’s are required to have health insurance. One of the highest causes of bankruptcy is unpaid medical bills. With a good healthcare policy, a big chunk of your healthcare payments are taken care of.

2. Fifty five percent of survey participants recommended driving a car that’s at least two years old. Don’t get me started on this one. I am a huge proponent of driving an older car. As the second biggest financial expense for most families (after housing), driving an older car can put tens of thousands or more dollars in your pocket over a lifetime.

3. Forty-four percent suggested spending less than their monthly income. If you spend less than you take in, you’ve got money to invest, grow, and build for the future. Today, as retirees are living well into their 80’s and even 90’s, it’s reasonable to think you might live 30 years in retirement.

4. Forty-three percent own their homes outright. No mortgage? No mortgage payment. Not only is paying off your mortgage before retirement a good financial move, it is also good for your mental health. It’s one less expense you need to worry about. Those nearing retirement may consider paying extra principal on their mortgage, to shorten the length of their loan.

5. Forty-one percent of successful retirees manage their own personal finance and investments. It’s not rocket science to manage your own investments. In Investing, Lazy Portfolio Drill Down I show how a three fund portfolio beat several other more complicated index fund portfolios. In fact, the winning index fund lazy portfolio was created by a second grader (with some help from dad).

6. Thirty-six percent reduced their living expenses. Come on now, I don’t need to dwell on this one do I? But if you really need some help here, buy my book, How to Get Rich Without Winning the Lottery.

7. Thirty-five percent cut back on extras (eg. travel, luxury items, memberships). This one sounds a lot like number 6.

8. Thirty-four percent collect passive income from stock dividends or interest. Do you get that investing long term helps build wealth yet? Even though interest rates are in the toilet now, they won’t be there forever. And with a corporate bond, you can boost your income (over that of a CD) to 3 or 4 percent.

9. Back to the car again. Thirty-four percent drive a car that is fuel efficient and/or inexpensive to maintain. This gets back to keeping car expenses low. Yet, if you really like cars and driving an expensive model is important, just cut back in another area that’s not a priority.

10. Twenty-four percent carry long-term care insurance. My dad had a five year stint in a care facility before he passed away and my mom mentioned more than once that she wished she had purchased long term care insurance. Fortunately, my parents managed their money well and could afford to pay for his care.

11. Twenty percent of successful retirees follow a carefully planned budget. That translates to 80% who don’t follow a budget. Consequently, if you’ve planned fairly well and retired, you may not need to follow a budget forever. Whew! So, you’re probably better off following some form of a budget, spending plan, or whatever you call it during your working years, and then upon retirement you’ve got a bit more flexibility. 

12. This one is my favorite; 18% moved into a smaller home, a less expensive neighborhood and/or a retirement community. Similar to numbers 2 and 9, driving an older and economical car, this one step can slash retirement costs by up to 50%. If you consider that housing expenses are usually one’s largest cost, by cutting housing, or moving to a lower cost of living area can solidify your retirement nest egg.

13. Seventeen percent state that continuing to work or spouse is continuing to work keeps them from running out of cash. I know some of you equate retirement with “not working”- there are others who enjoy the stimulation of working; and the extra pay relieves the anxiety that life will outlast money. Personally, every time I head into Home Depot, I envision working in the paint department, helping folks choose colors for their homes.

14. Only 10 percent collect income from rental properties. Don’t kid yourself, this “passive income” is never “work-free”. Ever had a tenant call at 2:00 am with a broken pipe? What about the manager you hired to “manage” the property who’s a moron and doesn’t get the property reports to you until three months past the deadline.

How to Retire Successfully?

It’s not difficult to retire successfully. Live moderately during your working life. Put some money away into investing. Don’t overdo the extravagances. Spend on what’s important to you, and save on what’s not.

The Retiree Next Door offers some fascinating insight into how successful retirees are living today and their lifestyles prior to retirement. Get The Retiree Next Door Free through September 30, 2014.

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