Retirement

4 Money Saving Tips for Senior Citizens Day

August 17, 2015 By Will Lipovsky 1 Comment

Senior Citizen’s Day is coming! It’s August 21st. The observance was established as a way of honoring the senior citizens of our communities. The day also brings awareness to social, health, and economic issues facing the elderly.

This post is geared towards what the younger generations can learn about our elders. Because… older people rock when it comes to saving! They’ve lived through some major economic hardships. They know how to make ends meet even on a depression-era budget. Here’s are some of tried and true secrets:

1. Reuse Everything, Waste Nothing

Reusing is one of the easiest and most effective ways to save money. Many of today’s senior citizens grew up understanding that every item has value. By looking for the value in items and considering how you can reuse everything, you drastically cut costs on goods. Here are some ideas for maximizing this old school money saving tip:

Save your leftovers – all of them. Have a plan for how you will use them in the next few days so they don’t go to waste. Even scraps are good to save for soups and stews. You can use teabags several times before throwing them out. Reuse containers for your leftovers and other storage needs. Rinse and reuse tin foil and plastic bags whenever possible. Most ‘throwaway’ items can be used many times before they become unusable.
Use every last bit. Don’t throw away condiments until you’ve used every ounce. Rubber spatulas are indispensable for this. Add a little water to detergent bottles to get the last few drops. You’ll save a lot of money over your lifetime by doing this.
Keep every scrap of fabric. Clothes that are too worn to donate make excellent rags. Bedding and other large fabric items can be re-purposed for curtains, craft projects, tarps and many other things. And storing scraps doesn’t take up much room either.

Suggested Reading:

10 Ways To Prevent and Reduce Food Waste
Frugal Tricks to Make Consumable Purchases Last Longer

2. Consume Less

When these folks were young, serving sizes were much smaller than they are today. For every food purchase they make today, they get more out of it than most people. Split a 12 ounce can of soda between two people and you have half the price. Adding breadcrumbs to hamburger stretches the meat. Running bread loaf ends through a food processor is a great source of free breadcrumbs too.

3. Learn Valuable Frugal Living Skills

There was a time when most women knew how to sew and men understood how to tackle every household repair. If you could sew, you’d be able to make $200 curtains with a $20 sheet set. If you understood household repairs, you could make your own furniture from wood scraps or repair your existing furniture if it were to break. Money spent on classes to learn these skills will pay off in savings.

4. Buy Once, Cry Once

Older people know how to make things last! Manufacturing standards today focus on saving at any cost. Quality only needs to be good enough to sell the product. But products used to have more longevity. They were designed to last a lifetime, not just a few years. Focus on acquiring well-made goods that won’t need replacement.

Your grandparents took ideas like these for granted. They grew up in a world where there was more time to spend on making the most of everything they had. Although you may not have the time they had, many of these ideas still work with today’s busy lifestyles.

Enjoy Senior Citizens Day. And respect your elders by not being so wasteful.

What If You Don’t Want to Retire?

March 8, 2013 By Jennifer Derrick 2 Comments

I have an uncle who is pushing ninety years old. He still gets up early, gets dressed, and goes to work every day and often on weekends. He doesn’t do it for the money; he’s covered in that department. He simply loves what he does so much that retirement has never entered his vocabulary. He owns his own business and even now that he’s hired a partner who will eventually inherit it, my uncle still won’t quit. And he shouldn’t. As long as his mind and body can handle the workload and it’s what he wants to do, working is the best thing for him.

Society seems to think that we should all retire at sixty-five and hit the golf course or the cruise ships. We should want to hang up our working lives and get on with “having fun.” But for some of us, working is the fun part of life. We like what we do and/or we enjoy the people we work with. Work gives our lives structure and purpose. Asking us to hang it up is like asking us to cut off an arm. Inconceivable and a surefire way to ruin, not improve, our lives. The good news is that people who choose not to retire may end up better off in many ways. Here are a few.

Better Health

Research shows that people who opt to keep working often experience better overall physical and mental health than those who retire. Work keeps your mind engaged and your body active, things many retirees don’t experience as often as they should. Working can stave off everything from heart disease to dementia for some people.

Better Emotional Health

Work can give you an outlet to help you deal with everything from the grief of losing a spouse to depression that comes from feeling useless or lonely. Work gets you out and among other people and gives you a reason to get up every day. If your identity is tied up in the work you do, losing that can bring on crippling depression even if you pursue other fun things in your retirement. Continuing to work may keep you emotionally healthier than retiring.

Better Financial Health

Working longer equals more money. While you may have to work longer if you aren’t financially prepared for retirement, choosing to work longer allows you to build up an even bigger nest egg. This is money that can be left to your heirs, donated to charity, or used should you eventually decide to retire, or if you encounter serious health problems. Working can make your nest egg last even longer or create a wonderful legacy.

You Might Save Your Marriage

If you’re used to being apart from your spouse most days of the week, the sudden closeness of retirement can cause you both to severely dislike each other. You may need to take things slowly, gradually adjusting to being together through part time work. Or you might just decide you’re better off if you keep working and give each other some space.

Social Connections

When people retire, they often have to look for new social groups since they get cut off from their primary group at work. They go to classes, or church, or take up group hobbies in an effort to connect socially. Some people just aren’t up to this sort of thing and instead end up isolated in their retirement. If you don’t retire, you keep your social group and it’s easier to muster groups for lunch outings or work parties.

A Chance to Change

If you work for an employer, you might not be able to continue working for them. They may subtly or overtly push you out in favor of younger, cheaper workers. If you want to continue working, you may have to start your own business or go freelance. That can seem daunting, but it can also be a chance to grow and explore your abilities. Maybe you want to do something new, or stick with what you’ve always done. Either way, having your own business can be liberating and challenging.

No one is going to force you to stop working and start watching re-runs of the Price is Right on your sixty-fifth birthday. If you don’t want to retire, don’t. Don’t do it because society tells you to, or because your friends tell you that you should. That’s what they want to do. If you want to keep working, even if only part time, do it. You’ll be better off in many ways.

(Photo courtesy of bowler1996p)

Time Flies and It’ll Cost You

February 7, 2013 By Jennifer Derrick 1 Comment

Last year there were changes to our health insurance plan. The employer has always used a high deductible plan and they have always been kind enough to contribute $2,000 toward that deductible. The money has always been available at the first of the year. Well, last year, they got a new plan. It’s still a high-deductible plan and they still contribute $2,000 toward the deductible, but the catch now is that instead of putting the full 2K in at the beginning of the year, they put $1,000 in at the first of the year and only give you the remaining $1,000 in July, if you have met certain requirements and earned enough “points” through the wellness plan. (The wellness plan gives you points for completing activities like getting your preventive screenings, taking a health assessment, listening to health related podcasts, and signing up for programs like nutritional counseling, weight loss, etc.)

In the first year of this program, too many people waited until the last-minute to accrue the required points. Since it takes a while to get scheduled for physicals and screenings and many of the other activities involve checking in over the course of a month, many people didn’t earn enough points and so lost out on the extra $1,000. The way the program is set up, it’s impossible to wait until the last-minute and hope to get enough points. And that’s sort of the point of the program. The insurer/employer wants you continually taking care of your health, not just going on a points blitz over one weekend and forgetting about it.

When the money didn’t appear in people’s accounts, there was the predictable uproar about how it was unfair and ridiculous to lose that money just because they didn’t get the points. How were they supposed to remember this stuff, or do it when they were so busy? Time got away from them and it wasn’t fair. Some said the employer should have sent out reminders, or walked them through the points activities.

To some extent I sympathize. It is hard to remember sometimes when a program suddenly changes. It can be hard to remember to do the things you need to do when so much else in life is more pressing or fun. At the same time, however, the program changes were announced more than a year in advance. People had time to set up calendar reminders, to go to the new website and get a feeling for how long each program would take and how long they would need to get the required points. The employer was treating the employees like adults by saying, “Here’s what’s happening and it’s your responsibility to meet these requirements.” That time got away from the employees is their own fault, not the fault of the employer or the insurer.

Time does indeed fly by faster than we realize. It seems like one day you’re celebrating New Year’s and the next it’s Memorial Day. And then you’re asking yourself how did Christmas come around so fast again. It happens to all of us. But when money is on the line, you have to make a conscious effort to keep up with what day it is and make certain you meet your obligations. Otherwise both time and your money will fly out the door.

This is true for many money matters, not just insurance programs. Rebates have to be redeemed within a certain period of time or you’re no longer eligible for the money. Coupons expire. Taxes must be filed by a certain date. Bills have to be paid or you incur late fees. Many benefits (government and those provided by your employer) have an “opt in” or enrollment period during which you have to change your elections or stick with the same thing for another year. Many money matters are time sensitive.

And then there’s the biggie: Retirement. You think time flies when you’re trying to redeem a rebate or complete an insurance program, think how fast it flies when it comes to your retirement. One day you’re twenty-two and just out of college and then seemingly just a few months later you’re forty-two and retirement is no longer so far away. It’s barreling down on you. Seemingly a few minutes later and you’re sixty-five and you’re there, ready or not. This is why financial gurus harp on people to start saving with their first jobs. Not only can you earn more interest that way, but it’s all too easy to put it off for too long. When you put it off and then wake up at fifty, it’s impossible to catch up unless you’re earning a huge income. You have to be on top of it from the beginning because time will fly by, and what seems like an eternity in the beginning looks like five minutes on the other side.

It’s up to us to manage the passage of time. We may not be able to slow it down, but we can take charge and make certain that we’re doing what we need to do when we need to do it. Start saving for retirement early. Make lists or spreadsheets of important financial dates so you’re constantly reminded that they are coming up. Frequently check your coupon binder for expiring coupons that you want to use. Leave rebate forms in a conspicuous place so they get turned in. When a new program is announced that’s time sensitive, don’t put off learning about it. Figure out what you need to know immediately so you know the requirements and can plan your time accordingly to meet those requirements.

Of course, all the knowledge in the world won’t help you if you still insist on procrastinating. Not only do you have to make yourself aware of time sensitive issues, you have to overcome your natural tendency to put things off until the last-minute. But if you can do those two things well, you’ll never leave money on the table because time got away from you.

(Photo courtesy of aussiegall)

Planning for Old Age: You Need to Do More Than Save Money

July 9, 2012 By Jennifer Derrick 5 Comments

You’d think that all anyone has to do these days to secure an enjoyable and comfortable retirement is save money. The media, financial gurus, and your employer harp on money as the end-all, be-all of retirement. Just get there with enough money, they say, and you’re all set.

Well, money is certainly important to your retirement plans. You’re going to need it to pay for housing, health care, and all of those fun things you want to do. But if you really want to enjoy your retirement, you have to make sure you are healthy when you get there, and that you have the energy to make the most of it.

My biggest hope is to be like the woman I met at the starting line of a marathon a couple of years ago. She was eighty-three years old and getting ready to start her fifty-sixth marathon. She’d run marathons in all fifty states and had no plans to stop. She told me that she’d been diagnosed with breast cancer in her fifties. At the time, she was out of shape, generally unhealthy, and had only run when chased. She was afraid that she wouldn’t live long enough to do all the things she wanted to do. When she finished her treatments, she decided to get healthy so she started running. One thing led to another and there she was, starting race number fifty-six. I admired her greatly. Here was a woman who knew that old age was coming and she not only wanted to make it there, she wanted to be able to participate in it fully.

Maybe you don’t want to run, but you probably have things you want to do in your old age. Maybe you want to travel, volunteer, play with the grandkids, play golf or all of the above. Besides socking away money, here are some other things that you need to be doing today while you’re “young” to make sure you hit your retirement years with enthusiasm and energy.

Exercise Your Body

Exercise will keep you agile and strong, helping to prevent broken bones and problems with arthritis later in life. It’ll also reduce the risk of heart disease and cancer. You don’t have to run marathons, but you need to get up and do something. Some studies now show that the benefits of exercise are cumulative throughout life, so the sooner you start, they better off you’ll be.

Exercise Your Mind

Exercising your body helps your mind, too, but there are other things you can do to help stave off memory loss and dementia (http://www.savingadvice.com/2009/01/12/103857_keep-your-brain-active-to-save-money.html). Keep learning new things and skills (take up a language that’s spoken in a country you want to visit once you retire, for example), do puzzles like crosswords or word jumbles, work jigsaw puzzles, play board games, practice memorization exercises, and read, read, read.

Eat Right

Eating well gives your body the nutrients and vitamins it needs to ward off illness and keep you healthy. You can indulge in the occasional treat, but the bulk of your diet needs to be healthy.

Deal With Your Stress

Stress ups your risk for heart disease and some cancers. Find a way to deal with your stress. Maybe you need to exercise, scram at a wall, meditate, write it all in a journal, or get a therapist. Maybe you need to eliminate some toxic tasks and people from your life. Find what works for you and keep it up.

Get Regular Checkups and Screenings

Get an annual physical and make sure you get whatever tests are recommended for you (mammograms beginning at age 40, colonoscopies beginning at age 50, etc.). The earlier problems are caught, the easier they are to treat and the less likely they are to become chronic issues that keep you down in retirement.

Nurture Your Relationships

Part of aging well is having well-developed relationships. You need friends and social contact. Isolation isn’t healthy. Start finding people you enjoy spending time with and work at those relationships. You may have to make a special effort to “get out there,” but it’s worth it. Join some groups that share your interests or beliefs and find some new friends. Volunteer work can be a great way to meet new people.

Explore Your Interests

When you retire, you’re going to have time on your hands. It’s better to start finding things that interest you now than when you’re sitting on your sofa wondering, “Now what?” Go ahead and explore your interests and get involved with activities you enjoy. Then, when you retire, it won’t be a matter of finding something to do, but simply doing more of what you already love.

Use Sunscreen

Skin cancer is one of the fastest growing cancers in the world. It’s also one that you can do a lot to prevent. Wear sunscreen every day, even under your clothes (unless you have UV-protective clothing). Since you can get UV rays through glass, this applies even if you spend your days in an office. Wear a hat if you’re going to be outside, and don’t forget a lip balm with SPF protection built-in. Yes, it’s inconvenient, but so’s cancer. There are lots of “daily” formulas of sunscreen available these days that aren’t as smelly or greasy as the stuff you remember from your childhood.

Stop Smoking and Other Bad Habits

If you smoke, stop it. Lung cancer and emphysema aren’t conducive to an enjoyable retirement. Similarly, stop drinking to excess or engaging in any other risky habits you may have. Bad habits aren’t always obvious. Quitting that soda habit that has you consuming huge amounts of sugar or artificial sweetener should also be on the list.

Lose Weight (and keep it off)

If you’re overweight, take the initiative to lose weight. Excess weight causes joint problems plus makes other diseases more likely. Once you’ve got it off (or even if you’re a normal weight now), don’t let your guard down as you age. Most people need substantially less food as they age because their activity level decreases and their metabolism slows down. Keep the weight from creeping on.

Now, you could do all of these things and more and still end up sick or incapacitated in some way. Sometimes life just isn’t fair and people who do all the right things end up in nursing homes far too young. However, it can’t hurt to do these things. You’ll give yourself the best chance of making it to retirement and actually being able to enjoy it.

(Photo courtesy of Ed Yourdon)

Retirement Planning: Consider Your Time as Well as Your Money

November 23, 2011 By Jennifer Derrick 2 Comments

Retirement can be a scary thing. You wouldn’t think so, since so many people look forward to the day when they can stop working and take it easy. However, the financial and emotional adjustments can cause problems if you aren’t prepared for them. Most of us just blindly save money toward retirement thinking that the most important thing is to have enough money stashed away to keep from eating dog food for twenty years. While that’s important, it’s also a good idea to make some contingency plans for the other issues you might face.

The biggest problem is what to do with your time. Most of us can’t wait to quit working, but once we quit, what do we do? We say we want to travel, spend time with family, play golf, or just sit on the porch, but after a lifetime of work is that enough? It might be. Many people find retirement enjoyable. Or you might burn through your “fun” in a year and be stuck wondering, “What now?” The loss of a routine and feeling like you’re no longer contributing to something can be debilitating to those who haven’t seriously thought about their retirement activities.

To avoid this, try easing into your retirement. Keep working while you step down your hours or take a part-time gig. You can even quit your day job and start your own little business, either doing what you did before or something else you really enjoy. You’ll still have more free time, but you’ll also get to keep your daily routine and be productive. You’ll also keep earning money which can be saved or used to delay having to tap your retirement assets.

Keeping busy in retirement is essential to keeping yourself healthy. If you’re just sitting on the couch watching mind-numbing TV, you’re increasing your risk of disease and mental deterioration. Even if you don’t want to work, make sure you have enough hobbies and interests to keep you busy. Let your other interests and hobbies gradually crowd out your work rather than just quitting work all together. When the day comes that you want to quit for good, you’ll have enough other things to do to keep you occupied.

You can also opt to forego retirement altogether. A lot of people feel ashamed to admit that they actually want to keep working. Retirement has been built up as the holy grail and those who choose not to take it are often thought of as strange. After all, who wants to work forever? Well, plenty of people do. Work equals life for a lot of people. If you take it away, they flounder. Such people are actually better off keeping their jobs or moving on to other full-time ventures such as running their own business. Without a job, they get depressed, angry, or anxious. If this is you, don’t feel bad about keeping your job as long as you’re healthy enough to do it.

If you do retire completely, you can make the transition easier by sticking to a routine. It doesn’t have to be the same routine you had when you were working, but a routine can give your days structure and reduce the chance that you sink into depression and wonder what you’re doing with your life. Get up at the same time every day and try to eat at the same times, too. Construct your day as if you were still punching a clock. Use your mornings for exercise and chores, for example, and your afternoons for hobbies or friendly gatherings. A schedule can keep you productive and engaged.

Before you opt to tell your boss to kiss off and retire completely, make sure you’re emotionally and financially ready for it. You can have all the money you need sitting in the bank, but unless you’ve given a lot of thought to your retirement plans, you could be setting yourself up for a few years of confusion. Make sure you have a plan in place for what you will do with your time, as well as your money.

(Image courtesy of grantlairdjr)

Stop Robbing Your Future Wealth

March 28, 2011 By Jennifer Derrick 3 Comments

One of the hardest things for many people to see in relation to their finances is how their actions today are robbing them of future wealth. It’s easy to focus on today and think that if you can make the payments on that living room set that it’s okay. It’s easy to think that borrowing from your home equity to fund a kitchen remodel is a great idea. These are all things you want today and the future seems so far away. You figure there will be time to make up the difference, or that just this one little payment won’t hurt your future. The thing is, every time you borrow money you are robbing yourself of future wealth. You’re committing future dollars to pay for today’s purchases.

Sometimes you have to borrow money in order to increase your future wealth, but these cases are rare and are almost always related to two things: Homes and education. You may have to borrow money to buy a home, but that is an asset that may increase in value and add to your bottom line after many years of ownership. You may also take out money to fund an education. Ideally you’ll earn more money thanks to this education and borrowing that money will have been a good idea. Beyond these two uses, borrowing money is simply robing you of some of your future wealth.

When you make payments on a credit card, car loan, or other type of loan, those payments are sucking money away that you could be saving for later. The higher the interest rate, the worse the impact on your future wealth. Not only are you paying for the items you bought, you’re paying extra in the form of interest. That $10,000 car can end up costing thousands more depending on the length of your loan and the interest rate. All of that extra money is money that has been “stolen” from your future.

It gets worse when you take a loan out against your home equity or your retirement. In these cases, not only are you out the loan plus interest, you’ve lost some of your future wealth building blocks. The money in your retirement plan will continue to grow if you don’t touch it. Even if you don’t add to it, keeping the principal at a set amount will earn you a certain return in the form of interest or market appreciation. When you take out a loan and lower the principal, your amount of return decreases. That money is gone forever. Even if/when you return the account to its previous level, the time when your principal was lower has resulted in a loss that can never be recovered. All of that return that you could have earned in the year or two it took you to pay it back is gone forever.

Home equity loans are another big future stealer. In a normal market, many homes appreciate in value over a long period of time. Ideally, by the time you’ve owned your home for twenty years you’ve paid down the mortgage to a level that is substantially lower than what the house is worth. This difference between what you owe and the value of the house is your equity. Say your house is worth $150,000 and you owe $75,000. You have $75,000 in equity. If the house is paid in full, you have $150,000 in equity. When you sell your home, that is money you get to keep (or put towards another home). When you borrow against your equity, however, you’re stealing that money from your future. If you have $75,000 in equity, but a $40,000 equity loan, your actual equity is reduced to $35,000. This means that if you sell your home, your profit will be considerably less. Should your home decrease in value while you still have that loan, you may lose all of your equity and end up upside down on the home. All of that wealth you thought you had is suddenly gone.

Sure, there are emergencies where some sort of financing or borrowing may be the best alternative. In these cases, robbing your future to pay for today may be the only choice that stands between you and financial disaster. In these cases, you do what you have to do to get by. The problems arise when you make it a habit to borrow money to pay for today’s purchases with tomorrow’s money. When you commit to using future dollars (or money that you will need in the future such as retirement funds or equity) to pay for today’s purchases, you slash your future wealth. Before you sign on the dotted line, think about the impact your choices will have on your future.