Retirement Living

When individuals begin considering their way of living in retirement, they may consider moving to a small, cheaper home. Some may even look at seniors’ condos or retirement homes. If the house you live in has been paid off, you may think about downsizing but you may actually see your housing costs increase, even though technically, you are reducing.

Baby BoomersMany who have lived in the city are moving to a cheaper, less urban setting.  This also typically lowers property taxes. Some individuals feel adventurous and that they are financially at the age in their lives when they can see the world and travel without obligations such as work and children to care for.  Some enjoy doing this in an RV. RVs typically cost between $5,000 and $160,000.

While travel is seen as exciting by some, it is not for every retiree. Some prefer to remain in the community they have live in for a while-they feel better knowing their neighbors and possibly having family nearby. They may already be familiar with the activities in the area.

Some do look at moving away, especially if family is living far away.  A lot of people prefer to be near their adult children and especially grandchildren. Moving near family also provides a connection in a new city. Socializing and activities may be introduced by your family.

If you are to do it feasibly, why not go live in Australia for a few months? It does not have to be there- the point is , go do what you always wanted to but could not because of work, school or caring for children.

Today, many retirees are pursuing a college education, or at least taking a few classes.  Many are seeking post-secondary education either as additional education or purely for interests’ sake.  In many American states, residents are eligible for a few months of free tuition if they are over the age of 65. Many find it beneficial to their mental health, to keep their minds active and always learning. You can take the Introduction to Shakespeare course you never had time for, or Introduction to Physics.

Some,  but certainly not all retirees find themselves feeling restless during retirement, especially at the beginning. When you have gone to work every day for fifty years, this feeling is not uncommon. Many retirees look at volunteering as a means to do something with their time, improve certain skills, utilize skills they already possess, and meet new people.  There are many organizations, both profit and non –profit, needing volunteers. Finding a volunteer position which fits your skills and interests should not be too difficult-from building houses to serving soup at a soup kitchen to working with children- everywhere is searching for volunteers. This generation has been involved with activism for decades, pursuing a cause you are passionate about but were never able to dedicate a time to- the time is now!

However you decide to spend your retirement, whether it be volunteering, lying on a beach or traveling the world, make sure it is exactly how you want to spend it and it is what is making you happy. After all, you only have one retirement.

Flying South for the Winter

Many people consider flying south for the harsh, freezing winters to spend them on the white sand, by the ocean, basking in the sunshine.

Sandy BeachesHow do you know if this is the right decision for you? How will you know if this is what you need to enhance your retirement? Many think about becoming a snowbird in their retirement because they feel this is the first time  in their lives with no work pressure, no caring for young children, and they feel they have finally earned a breath of relaxation. There are a few thing you need to be aware of before you give yourself permission for takeoff.

You must consider your current income.  Your income is now likely fixed, unlike before.  Be sure to shop around, looking at different accommodations and prices, what may be included in some packages, and ensure this is something you are able to spend your finances on.  The last thing you want is to have overspent when on a fixed income.

If you are traveling with a spouse or companion, discuss finances ahead of time. Plan what will be spent and be sure to give yourselves time to consider the options of where you will stay, what you will be spending on food and drink, if you will have transportation while there. If you have family, you will be away from them for months at a time. Think about how that will affect them and how it will impact you.  Discuss with those family members how often you will be in touch with them, and if they are able to visit you.

If you do end up flying south for the winter, you may choose to rent or own a home. Depending on what works best for you, you may choose either- some recommend turning off heat and hydro in your original home to cut down on the bills. Some choose to have a live-in house sitter, in which case you will need to keep those things on. Depending on your financial situation, you may choose to have the house sitter live there only paying bills.

Some people may also use a sitter for their pets, however most people will bring their pets  with them.  If you do, ( and you probably will) you may bring them on the flight with you. Almost all airlines charge a fee for bringing a pet on the airplane. If you end up driving down south, ensure your pet has an abundance of food and water. Be sure your pet has seen the veterinarian  and has all vaccines up to date. Some airlines will require  certification for a pet before flying.

If you choose to snowbird, you will want to choose insurance that cover them from state to state ( if American). If flying to the US from Canada, be sure to have Traveler’s insurance that will cover you in case of an emergency. Canadians are able to travel to the USA for six months provided they possess a passport. Bringing a birth certificate along with your passport is best.

Snowbirds may want to anticipate that they could need to get home very quickly in case of an emergency such as family illness or death. It is recommended to set money aside for flights home should this be the case.

Some novice snowbirds are nervous about making friends. An important thing to remember is that all snowbirds were once in the same position.  Within the community, and on the beach, there is ample time to make new lifelong friends you can see yearly.

Why Real Estate Shouldn’t Be Your Only Retirement Plan

It seems like a ready-made retirement plan: once you enter your golden years, you’ll sell your home (or get a reverse mortgage) and live on the money you’ve worked your entire life to accrue. This strategy may work for some, but there’s no guarantee it will fit your financial needs. Before you make real estate your primary financial plan for retirement, consider these ideas.

Realestate retirement planIf you’re thinking of selling your own home to help pay for your retirement, there are a few factors to consider, such as how the sale of your home will affect your eligibility for retiree assistance programs and how your new plan to rent will affect your lifestyle. In addition, if you opt to participate in a reverse mortgage program, you’ll actually end up accumulating debt in the form of interest on your borrowing amount. And once you’ve sealed the deal, it isn’t as if you’ve got a landlord to take care of things; you still have to pay for any large-scale maintenance on your home while you live in it, not to mention the property tax.

The second real estate scenario is a trope so common that it’s beginning to border on cliche. Eventual retirees see real estate investment as a viable plan for raising money to live off of when it comes time to retire. But this plan has several holes, the main one being that no one can tell you how the real estate market is going to pan out as you come closer to retirement age. If you’ve invested in a piece of property to save money for retirement and the value of it goes south, you could actually end up with more debt, instead of savings.

Both of these cases should be motivation enough to come up with a multi-faceted retirement plan to keep you financially secure. One of the best steps you can take, if you haven’t already, is to find out more about your employer’s retirement savings plan and/or pension plan. Or, if your employer doesn’t offer these benefits, you can start your own Individual Retirement Account, which not only gives you a reliable way to save but also offers you a tax shelter on the income that you put away.

Once you have a vehicle for saving, start thinking about how you can build upon your nest egg. You’ll get social security benefits, but this is meant to be a supplement to your savings, not a primary means of living. In the meantime, you can make small income here and there by turning a hobby into a part-time job or selling discs on musicMagpie, for instance. Or you could plan to contribute all of your income tax refund to your retirement account each year for a large annual boost.

The most important goal to have when it comes to retirement is to build a portfolio of varied sources of income. It’s great to work toward a real estate goal, but a retirement savings account will keep you fiscally secure in case that plan falls through. A better option is to monitor this plan along with a savings account and any benefits that you can expect from the government; weave these several income possibilities into a strong net, and it will support you in your golden years.

Looking for The Quiet Life But Not in Dubai!

Even if you’re aged 20 something or thereabouts, it’s never too early to plan for retirement, right? How often have you heard that particular piece of wisdom? More importantly, how many of us can actually be bothered to think about retirement with several decades of commuter madness yet to suffer? The answer more than likely is very few of us. Yet, given the changing demographics we’ve all heard so much about, retirement could very well add up to an increasing chunk of your life. So where do you want to spend it? What about the United Arab Emirates (UAE) city of Dubai?

Dubai

Yes, we all have dreams and climbing the career ladder is probably one of them. So is spending the  increased salary on those little luxuries that help to make life rather bearable. Then at some point along comes a wife, or maybe a husband, a mortgage and 2.4 children later you’re struggling to make ends meet. Recognise the scenario? So you temporarily boost spending power a little bit by taking advantage of the credit card offers from HSBC, Barclays and the other major banks which are so hard to resist. As you walk the dog, no doubt thinking deeply about HSBC and personal banking, retirement is the last thing on your mind!

But let’s get serious for a moment. The UAE may be a great place to go on vacation and it’s not hard to find work there either. In fact, it’s an expatriate paradise. Millions of people from around the world settle in the country – and in Dubai in particular – for a year or two, and longer, reaping huge financial rewards in the process. Easy to do given the rather relaxed taxation regime. Who wouldn’t be able to save a little for the golden years when the tax rate is a big fat zero.

But a place to retire? Maybe, providing you don’t mind the searing heat, the crazy traffic, the relatively high cost of living and the frenetic lifestyle. Work hard and party hard appears to be the norm for many US, UK and many of the other expatriates from around the world attracted to incredible cities like Dubai. Would you want them living next door to you? Perhaps not.

Then there’s the cost of healthcare to consider which becomes ever more important as the years progress. A YouGov survey carried out at the end of 2012 revealed that UAE citizens were generally positive towards and trusted the healthcare sector in the country. However, they were concerned about healthcare costs and most would choose to seek treatment abroad if they fell seriously ill. They were also concerned about transient foreign workers.

YouGov says, “It is well-known that a large proportion of the specialized healthcare is made up of passing foreign workers and that the UAE is in close proximity to competitive medical destinations such as India and Jordan.”

Of those surveyed, 61% claimed they were not satisfied with the treatment costs; 60% saw the high prices of medical care as a substantial challenge for the healthcare industry; and 58% said they would choose to seek medical treatment abroad if they were to fall seriously ill.

Go here for more information on the YouGov survey.

**Photo by Eugene Kaspersky**