As the time for retirement draws closer, one of the biggest concerns people may have is where should they retire. Should they stay where they are right now or make a complete change to a new location? This can be a tough decision for some people. We know people who have stayed where they lived and worked and had a great life as well as others who pulled up their roots and moved to a totally different location.

How Can I Decide?

The first question you have to ask yourself is how happy are you in your present location. How close are you to family and friends? We have seen grandchildren can sometime play an important role in this decision. You don’t want to have a major expense each year having to travel to see you friends and family unless of course you enjoy traveling.

Other things to keep in mind are what do you like to do in your spare time? Do you like to fish? do you like the shore or the mountains? What about the weather that you prefer? Some enjoy colder weather over hot. This would determine whether you live in Montana or Arizona.

How To Discover Where You Want To Live When You Retire

Here is something my wife and I are doing right now. We are taking a week’s vacation and going to locations we think would be great to live. We aren’t going there to see friends or family, but to check out the community as if we were being transferred there to work. We go and look at houses, visit the Chamber of Commerce, and just do a thorough evaluation of the town.

While this may seem boring to some, we have found it to be a good way to build a short list of where we want to live after we retire. Here is our plan. Develop a final list of about four or five locations and then go and live there for 2 to 3 months after we retire. Yes, we plan to make it an adventure. Why does retirement have to be boring where you sit in a rocking chair all day? Boring…

Make This Decision A Fun Time For You and Your Spouse

Once we do this final evaluation, then we will see just how well we really like the location. It could be that we like being in the north during the summer months and in the south during the winter. We just might join many snow birds and make the trek each 6 months. Who knows? The real thing is that we are planning on making this a totally fun event in our lives and you can too.

Until next time…

This is a good question to ask yourself regardless of what age you are. As many people who have come before us have said, the sooner you start, the better it is for you. Why? It is called the power of compounding interest. You know the Rule of 72.

Rule of 72

How does this rule work? Well, it’s quite simple that any one can do it. You take the number of years and multiply it by the interest rate. Whenever it equals 72, the amount you have invested will double. Of course the more years it is invested, the more times the investment will double. This is a rough estimate but you can take the interest rate times the amount you invest and divide by 72. Then multiply the result by 2 to get a rough estimate of your amount you would have.

Let’s look at a few examples. If you invested $1000 at 6% interest, it would take 12 years to double your money. In this case, you divide 72 by 6 (the interest rate) and you get 12 which is the number of years. For this amount to double again, it would take another 12 years so that in 24 years the original $1000 would be $4000. A different way to look at it would be to say you know the rate (6%) and you know how many years to retirement (15 years). You would multiply 6 X 15 which equals 90. Divide 90 by 72 and you have 1.25. So your money you have right now in savings will be 2.5 times the value it is today.

Wealth Ratio Rule

The real way to plan for retirement is to work with what we call the wealth ratio. This ratio is the amount of money you have coming in each month without you having to work divided by your monthly expenses. You goal is to get the wealth ratio to one or greater. When you do that, bingo, you are have infinite wealth.

Infinite Wealth?

Yes, that’s correct. Infinite wealth. This is a mindset change that needs to take place. The challenge is that people think they have to have millions saved to be able to retire comfortably. That is not the case. All you need to focus your energy on is creating various cash streams that flow into your life. This could be stock dividends, interest from savings and bonds, real estate income, income from a part time business, etc. You may have heard this called passive income. It is income that comes in automatically without you having to do anything (like going to a job) to get it. It is always there.

Many People Have Limited Wealth

If you were to lose your job, how long could you last without any income. Most people fall back on what savings they have, but they usually have no more than a few months before they are flat broke. In essence, they have about 2 to 3 months of wealth. Now what if you have investments you have made that pay you every month. You might have a rental property where you earn a few hundred a month, some dividends or interest might add to that as well.

What you should focus on is how you can get to the point where you have generated enough passive income flowing to you so your monthly expenses are covered. For example, if you had $2500 of passive income coming in and $2300 of monthly expenses, you could live without worry and still have $200 a month to invest on generating more passive income.

How much does it take?

Here is an interesting scenario to illustrate how it doesn’t always take millions to be infinitely wealthy. I read in the news how a school teacher had saved $300000 over a 25 year period but didn’t ever seem to think they could retire comfortably. A friend of this teacher recommended that the teacher take that money and buy a piece of property.

Shortly after the purchase, McDonald’s contacted the teacher and asked if they could lease the property for 20 years and offered to pay them $3000/month with an option to have the payments adjusted for inflation each year over the 20 year period. At the end of the period, the lease would end and the teacher could keep the buildings. Of course, McDonald’s included the right to renew the lease at the end of 20 years.

Look Closely At This Scenario

This teacher had lived on a limited salary and really didn’t have a lot to look forward to in retirement. Now they had $3000/month coming in along with their teacher retirement. Shortly after closing on this deal, the teacher took early retirement and has a wealth ratio greater than one because their monthly expenses was less than $3000/month. They have extra money to use for other things they would like to do from their teacher’s retirement pay. The beauty of this is that instead of eeking out a living from their retirement pay, they have more than enough money. Also they still own this prime corner lot which can continue to pay them for many years to come.

How should you plan for retirement?

The answer is simple. Focus in on the wealth ratio. The faster you get it to one or more, the faster you can do what ever you want in life. The real benefit from this is that once you reach that, you may find even bigger things you can do with your time.

Until next time…

In the United States, over half of the population is over the age of 50. This means that in the next 10 to 20 years these people will be reaching the retirement age. With so many people rapidly approaching this golden time, the big question many may have is will I be happy.

Retirement Doesn’t Have To Be Scary

Many people go through life wishing for the day that they can retire from their job. Many times this is more related to the fact that people hate what they do in the first place. They forget the only reason they are working for the company they work for is that the company was hiring when they showed up at the door. This should not be the case.

Life Is Too Short Not To Enjoy

If you don’t like your job, go get one you love. That’s one of the principles to a happy retirement. Now this may sound really off the wall, but jobs don’t have to suck. When you find one you love, you will want to keep on doing it. That’s right, you won’t want to end your career, but continue it. Who says you have to retire any way.

People Who Quit, Die!

It is a proven fact that many people die within a year or two of retiring from their job (whether they liked it or not). I had two supervisors who died within 6 months of retiring. They didn’t have time to “enjoy” their retirement. With this in mind, wouldn’t it be better to just develop a life you have fun doing right now. Just find ways to have fun at work, at home, with friends, with family, where ever.

Set Yourself Apart

When you decide to be happy each and every day whether you are “retired” from your job or just love doing it, you will set yourself apart from many others. I have often had people say to me, why are you always so happy. My reply is what is the alternative. They then realize that happiness is a choice. You can enjoy today or loath the day. You can enjoy your job or loath your job.

Am I Telling You To Work Forever?

No way. It is important to live your life the way you see fit as long as it does no harm to others. Does your current situation suck? Then go out and do something about it. Take action today to change it. This is what Retirement Cures is all about - taking action to be able to live the life of your dreams.

What are you going to do about it? Will you get to the end of the year and make a list of wishes that won’t ever happen or are you ready to take the steps, however small, to get from where you are to where you want to be. If you want to be able to retire happy, then today is the day to do something different. What’s stopping you?

Go For It! You’ll be glad you did.

Until Next Time…