Retirement Sim

My brother retired yesterday.

I can't imagine that. It's not a cliché when the previous generations cautioned us to take our time and enjoy the ride, because you arrive at retirement age in an instant.

The hubs and I both are committed to work, at least until we figure out the medical insurance thing. That provides plenty of incentive to keep our feet in the stirrups. I am noticing a little bit of panic beginning to form around the edges as we approach the concept of retiring, not knowing if our choices will sustain us safely and comfortably in old age.

The financial planners hawking a million dollars in the bank drive me insane. Who ARE those people? So we got to thinking, how do we really know what retirement transitions will be? How much will be enough for a middle class hard working couple without much of a pension coming in? Short of a debilitating disease that wipes us out in the first year, how have we done with our retirement planning?

That is what hatched the idea for a little pre-retirement-readiness simulation for the next couple of months. The goal is pretty simple: by living on the budget you think will be there, what will you learn about money handling and lifestyle choices and learning a different way to live? 

To prepare, we are exploring our budget in depth. We are categorizing expenses into hard and soft - rigid expenses like mortgage, insurance, trash pick up, life insurance - things you can't alter month to month; and pliable ones like food, gas, electric and water use, shopping, gifts, entertainment - that are adaptable.  We are looking and charting our expenses and what percentage it uses of earned income.

For the next two months we will live on a budget based on earnings through Social Security and my little school retirement. We'll calculate earnings based on retirement at 66 because no way can we deal with the medical piece without Medicare.  Other income we receive will be stowed in savings.

I know that in *real life* there is the underlying confidence of having the WorkerBee there's-more-where-that-came-from mindset. The simulation won't create the anxiety of loss of earning potential that I imagine is part of retirement. But I hope it will show where we are with what we've set up for ourselves.

Insight goals.
--about modifying what we're doing to achieve an even greater quality of life
--about our current money habits of pulling from savings and how quickly we'll deplete the nest egg without adapting
--about the gaps we find and whether we can rush to fill them before we retire

Simulation dates will be September 1-November 1, 2014.  We will keep you posted.