What’s important and different about being a woman in your fifties heading toward retirement?
Assuming that the money you have saved is not augmented by an inheritance (parents needing care can eliminate an inheritance) or some other significant influx, how should you think about your retirement? Three things:
- Know your values.
- Know your expenses.
- Know your risks.
Values: You have the freedom to spend money on what is in line with your values. What do you value? IF it is a trip abroad, are you willing to be sure you can cover the expense by choosing wisely about how often you are eating out or having a drink (often expensive) with friends?
Are you still pulled into spending more than you want because the whole group is going to do this, or buy that? You go to an expensive restaurant and others are having drinks and appetizers. Your meal was on the less expensive side. They decide to split the bill equally. Is that what you intended? You’ve just subsidized their good time.
Ask before you spend money, which of my values is this enhancing: staying fit, giving to charity, looking good, being financially secure?
A professor who had retired from teaching decided that the cost of cut and color was no longer worth it. She had her hair cut and let it go gray. Those dollars could be spent elsewhere.
Thinking about your values may make each thing you spend money on an addition to your life not just an expenditure.
Expenses: Budgets can be as detrimental to good health as diets. However, the world of guesstimates is also dangerous. You need a baseline which shows you THIS is what you are actually spending. It includes dry cleaners, vet bills, postage, apps, costs for repairs and maintenance of your home. IF your home is a house, then the detailed costs down to having the gutters cleaned and the AC / heating system tuned up must be included. Such details are often overlooked. No wonder people look for reverse mortgages.
Figure on expenses rising by at least 4% a year with medical costs increasing by 5% or more. If you want to be independent and secure financially, you want to have the numbers helping you, not haunting you.
It is likely your portfolio can be improved to grow the income and the principal. Growth and guarantees can create a tranche of security. Talk with someone knowledgeable who you trust.
Risks: If you had to be quarantined for 14 days, is your banking set up to pay the bills? Who walks Fido? Who takes the car in for an inspection? Who returns the books to the library? Who brings in the groceries? Who does the laundry? What if you need not 14 days of care but long-term care? Do you have a devoted group of friends and extended family who would commit to being there daily to take care of you? IF not, how are you planning to address this risk?
You are used to being your own backup, but sometimes that isn’t enough. What are you putting in place to cover health and financial risks?
Being an independent, single, woman headed to retirement is an invigorating time because it can all be on your terms. You can have a retirement that is satisfying and full of self-discovery. It’s all in your grasp if you have thought deeply about what is important to you, your values, how your money supports your values and how you have braced yourself for health and financial risks.
Enjoy your days!