Design your own retirement, choose your path

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There are a few wonderful and surprising things that are true about your retirement:

1.  It’s yours. It’s special to who you are, to what you value, and to what you have to work with.  The media makes it sound as if there is one kind of retirement — the one that the people in the magazines and commercials have, with private jets and Adirondack chairs. These images are hard to relate to, and they have nothing to do with most people’s lives after they stop working full time.

2.  It will look a lot like your life before retirement. As I lay out in this post, your lifestyle will likely be similar to the one you have just before retirement. and will cost about 80% of what your annual costs were right before you retire.

3. There are a lot of ways to get there. Plainly and simply, you will need to have enough income to cover those costs. Everyone makes you feel that you need a large investment portfolio to fund your retirement, but that is not the case.  You need income, some of which can come from an investment portfolio, but also from a bunch of other sources, such as:

First things first.  Social Security income will anchor your retirement. For example, a woman who is retiring at age 68 on an expected benefit of $1,000/month would receive $1,160 per month or $13,920 per year. Here is a “calculator” for how much in benefits you expect to receive, or ask the Social Security Administration for your exact number.

Rent Things. Imagine if that same women converted her basement to a one bedroom apartment and rented it to her nephew for $600/month, for a total of $7,200/year.  She also could use of some land behind her house as pasture for the horse stable next door @ $150/horse/month. At three horses, that’s $5,400/year.  Airbnb and other home sharing services allow you to turn your own home into rental income. Uber and Lyft allow you to “rent” yourself and your car for extra income.

Sell Things. Sell things to supplement your income within a given year.  My father sold his Harley to my nephew last year, opting to take monthly payments of $200 until it was paid off ($2,400 for the year).  He enjoyed receiving the deposit every month, and my nephew got to enjoy the motorcycle while paying it off.  This could mean selling your Hummel collection on eBay, and then when the curio cabinet is empty, selling that on Craigslist. I know an insurance agent who goes to Walmart on Black Friday, buys things at a deep discount, and then sells them for 4x the price on eBay.

These are just a few ideas.  What can you do to design your own retirement?

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