Move to Indonesia for a Comfortable Retirement

We work most of our lives to ensure that we have a good quality of living and can look after ourselves when we’re older. The norm is to settle into a certain space and stay there for the rest of your days once you’ve retired. But why settle for average? You’ve spent enough time in the same spot. It’s time to focus on yourself a little: mix things up a bit, seek adventure, explore the world. A great place to start your retirement could be Indonesia. This unitary sovereign state and transcontinental country is located mostly in Southeast Asia, however it does have some territories in Oceania.

If stretching your retirement savings and getting variety in the bargain is what you want, then this might be the place for you. It has over seventeen thousand islands! So there’s bound to be somewhere within its realms that will cater to you, your wants, and your needs absolutely perfectly. Here’s everything you need to know about getting the funds together for a comfortable lifestyle in this beautiful overseas location.

Indonesia for a Comfortable Retirement

Properties

One thing to bear in mind if you are considering renting a property for the long-term in Indonesia, the total cost may be charged up front. This may be undesirable as you might find that you don’t gel well with the location, the given property has issues, or you simply want to move somewhere else. However, this rental policy is understandable, as landlords don’t want to let other opportunities slip should you hand in your notice to leave unexpectedly.

If you have savings set aside and are considering moving to Indonesia more permanently you could sell up your current home and use the proceeds towards investing in a property of your own. Of course, prices will differ according to the area you choose to buy in and the quality of the property you show an interest in. That’s a given, but you’ll be surprised how far your money can take you there. For an example, just take a look at some of the properties on https://rumahdijual.com/bekasi/rumah-murah or realtor.com-Indonesia.

The variety is astounding too. Regardless of what you have in mind in terms of design, size, or stories, there will be something for you. The exact location of your property will have an impact on its price. The following cities tend to have varied costs, so from most expensive to least expensive, good options are: Jakarta, Bandung, Denpasar (Bali), Bengkulu, Surabaya, and Yogyakarta. Take a look around. Remember to always first visit and understand all the rules/laws about owning real estate before putting an offer in. It’s always important to be absolutely certain.

 

Cost of Living

While Indonesia boasts some of the most expensive hotels in the world, the cost of living in the region is one of the lowest in Southeast Asia. People are drawn by its stunning landscapes, beautiful beaches, and it’s friendly people.

Indonesia for a Comfortable Retirement on budget

Dining

As with pretty much anywhere in the world, cooking for yourself is going to save you a lot more money than if you decide to dine out for every meal. However, when it comes to dining out in Indonesia, you may actually be able to afford it! Street food and local restaurants produce brilliant quality snacks and meals at an unbelievably low price. Street food can generally be sourced for one or two dollars and a meal in a cheap restaurant will often range from three to four dollars.

Just remember to avoid international chains where possible, such as Mcdonalds and Starbucks, as prices are just as high as they would be anywhere else. There’s such better quality and value elsewhere that you can’t help but spurn fast food options, opting instead for local cuisines.

Also bear in mind that imported food will always cost more too. So opt for local brands in the supermarkets. Just be careful if you have allergies, it’s good to have someone at hand who can help to translate ingredients for you.

 

Transportation

You’re going to want to get out and about to explore the local area, places further afield, and generally go about your day-to-day business. So how much can you expect to fork out for transportation? Well, public transportation in Indonesia tends to be very affordable. The bus can generally be taken for less than a dollar and taxis will charge around thirty cents a mile. Bargain!

If you want a little more independence, you could hire a scooter. These are, again, cheap and can generally be rented for a few dollars each day. This is great if you’re simply using them on an as-needed basis. Just be sure to have the necessary documentation to ride them. You might like to practice a little, or travel on public transportation for a while before taking to the roads yourself. This allows you to get used to the local style of driving, as well as picking up on road signs, road markings, and other things that will help you to improve your handling of the road once you’re on it  yourself. If you want to drive your own car, gasoline is around seventy cents a litre ($2.65 a gallon), which is again pretty affordable. In terms of getting from A to B, you’ve got it pretty good in Indonesia!

 

Entertainment

Now, besides exploring and taking in the astounding scenery, you’re going to want to do something that will keep you entertained and occupied now and then. So, if you’re searching for something different to a meal out, what can you expect to spend? Well, there are plenty of local bars and nightclubs too. So if you’re into that kind of thing, you’re well catered to. Alcohol isn’t cheap and you can generally expect to pay an entry fee to clubs, but that’s pretty similar wherever you go in the world. However, if treated as an occasional treat, it won’t hit you in the wallet too hard.

Then there are things like the cinema. Cinema tickets are much cheaper than home, coming in at around four dollars a ticket. There’s plenty of free entertainment to be taken advantage of too. On warm days, head down to the nearest beach, bask in the sun’s rays, lounge on the sand and take a dip in the ocean. Visit world-renowned monuments. Climb the base of Mount Bromo. Visit Tanah Lot water temple with its expansive water views. Explore Borobudur, an iconic historic Buddhist temple. The list goes on and on. With so many options of things to do, you won’t have a dull day for years to come. There will always be something to get you up and out of the house and keeping active, both in body and mind. What more could you possibly want from the place that you live?

Consider Indonesia for a Comfortable Retirement?

All in all, Indonesia could prove to be the ideal place to head for your retirement. Sure, it might be pretty far from your current location. But that’s half of the beauty of it. You get an escape, an adventure. You’re thrown out of your comfort zone and forced to be brave and boosting your confidence. You will be immersed in an entirely new culture, tasting new foods, listening to new music, and seeing new sights. You will learn another language, meet people you’d never have met under any other circumstances, and revel in some of the most astounding scenery that the world has to offer.

When people pay a fortune just to visit this place, why not move on a more permanent basis? The fact that it’s affordable is an extra added bonus! So, start doing your research, scour the property market, learn a few basic bits of the local language, and pay it a visit. You could be calling this wonderful place home sooner than you think!


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KNOW Your Retirement Budget Before Retiring By Living It First

How accurate do you want your perceived retirement budget to be? Nobody wants to mess this up because it can result in blowing through the nest egg quicker than planned and your retirement ending badly. That’s why it’s a good idea to actually KNOW your retirement budget before retiring. At least knowing as close as possible. That is best done by living your retirement lifestyle before retiring. The best way of doing that is by living as much of it as you can.  

We all run our numbers through a trusted retirement calculator based on our perception of what we will reduce our spending on in retirement. We may also add a bit to the budget to support our retirement travel desires. But there can be a big difference between perception and reality once living it. Here are a few pointers to help you KNOW your retirement budget is reality based.

Proving Conventional Retirement Spending Wisdom Right or Wrong

Everyone believes they will spend much less in retirement. We tell ourselves that because the notion that we all need 80% of our working income in retirement is a tall order to fill. That and it is far from being true for a lot of people. But the only way to KNOW is by living it first while you are still collecting that paycheck. Chances are if you can’t do it when still in the grind then you probably won’t be able to live with that budget in retirement either.

People do a lot of things because they either really enjoy it or they can’t live without the convenience it provides. Living your retirement lifestyle and budget before retiring is as much a personal mentality check as it is a retirement budget reality check. Some habits are harder to give up than others. That being said, this all should happen long before ditching the rat race. Getting this right is about the rest of your life in retirement. One should give themselves years of practice to work through this as it may take a gradual approach by incremental spending reduction and lifestyle changes instead of going abruptly cold turkey on the day you happily skip away from the job.

KNOW Your Retirement Budget Before Retiring 1

KNOW Your Retirement Budget Before Retiring

Giving Frugal Living A Shot

Frugality may be the last thing on your mind, but like it or not, most retirees do embrace an element of frugal living to stretch their fixed income and savings. Retirement budgets usually assume cuts in all kinds of spending. Adopting your more frugal retirement lifestyle in advance will not only allow you to understand how you will live but get you closer to knowing your retirement budget and whether you can live with it. Doing so in pre-retirement will also free up more money for debt elimination and retirement savings.

Nobody wants to live a life feeling deprived. Finding your frugal thresholds helps set a sustainable retirement budget and lifestyle to base your plan on. The first step is tracking where your spending goes. Then trimming back things you won’t include in your retirement lifestyle. Why wait until retirement? If it isn’t going to be important to your happiness in retirement then shed that crap now. Otherwise you may make a bad retirement budget assumption that will end up straining your plan.

Obviously there is employment related costs that can’t be cut in pre-retirement. Commuting, work clothes, occasional lunches out, etc. But tracking what you are spending allows you to accurately subtract that out of your retirement budget projections. It also lets you see how much you could save by trimming workday lunches eating out or other little things. Like parking your car and instead going for mass transit or carpooling and maybe saving even more money now.

Keeping it real

Living more modestly before retiring will get you closer to understanding what is realistic in your retirement budget. Thinking you will have time in retirement to clean your own house or mow your lawn to save money in retirement after firing the maid or landscape contractor will only happen if you can be happy doing that stuff yourself. If your perceived retirement budget isn’t including luxuries you pay for now, then live like you can’t afford what you freely spend on while working. Trim it away before retiring.

Sometimes we use the excuse of having little time to justify our convenient luxury spending choices when it might actually be we hate doing that stuff ourselves. Find out before you retire so your retirement budget reflects the truth.

Give Your Non-Essential Living Expenses Careful Review

Unfortunately retirement can and will mess with your mind. We just don’t go from career to retired without some mental transition effort and time to happily get there. Besides unintentionally connecting our self-worth to what we did for money, we also attach it to other things that may have a high cost. Like the county club, sports, hobbies, fitness club, over-spoiling the grand-kids, etc. Saying you are going to cut back spending once retired in areas you have connected with in this manner may be far harder than you can imagine.   

Instead of just assuming you can cut things in retirement, trim it back now and find out for sure. This will allow you to try out your assumptions.

KNOW Your Retirement Budget Before Retiring 2

Give up the gym and try working-out at home or other forms of exercise. Use public golf courses, scale back expensive hobbies or sports. Match your lifestyle now to try out your perceived retirement levels.

So much of what we enjoy gets attached to our self-worth. It can also be a big part of our social life and what we are retiring to. Both of which will also need to be shifted and worked on. There is no better time than pre-retirement to test your assumptions.

Some Retirement Costs Require Having a Plan B

Some costs can increase far above the inflation rate we use in our budget planning. You can’t always just raise your retirement budget when something you planned for or you really need ends up escalating in costs beyond projections. It will require making some big adjustments in retirement spending and lifestyle. It is a good idea to establish a Plan B and when possible practicing it before retiring. Some areas that have risen far above the inflation rate in recent years and have a huge impact on a retirement budget are:

Health Care –

If you retire before being Medicare eligible and things continue like recent history then expect double-digit increases year after year.

Property Taxes –

As home values recovered since the real estate bubble caused recession, property taxes have drastically increased.

Home and Auto Insurance –

Insurance companies pass their losses due to natural disaster to the customers whether you have had a claim or not. Tornadoes, hail, biblical rainfall, wildfires, and hurricanes across parts of the country are happening more often.

What you can do

When living your retirement budget, pay attention to these increases and identify where you can cut back in other areas if they bust your retirement budget once retired. For example, find out if you really can handle skipping or trimming vacations. If traveling is a huge part of your pre-retirement life and will also be in retirement then cut way back or suspend travel for one season. Then bank the savings.

Park the car and use mass transit or bicycle every weekend or when off work for a while. Understand that you may not be physically able to that in older age. Could you live without a car? Would you consider moving to a more mass transit friendly location to save your retirement budget?

Are you assuming that you’ll keep your huge entertainment cable or satellite TV package in retirement? Cut the cord for a while and see if you can live without that if you had to.

Can you consider reentering the workforce? If so, do have a plan to stay employable by keeping and/or gaining skills? How about staying physically and mentally fit?

These kinds of things should be part of your Plan B if things go awry.

If you find that unappealing then you must ramp up your needed portfolio savings target to accommodate the possibility of having to raise your retirement budget for these kinds of uncontrollable cost increases. That may be a turnoff if you’re already struggling to save enough as it is. But it’s always a great idea to over save than under save for retirement to handle all kinds of budgetary surprises.

Last Words

Living your retirement lifestyle and  budget before retiring is about getting it as close to reality as possible. In both your financial numbers and the assumed retirement lifestyle you are planning for.


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4 Simple Ways To Turn Your Early Retirement Dream Into A Reality

We all ache to quit the rat race. The daily grind of the commute, dark winters, a stressful office environment and performance reviews can lead us to wonder why we put ourselves through it. Surely, there must be more to life? The thought of retiring at 65 fills you with dread – that’s another 30 or 40 years with your nose to the grindstone. It doesn’t have to be this way.

You see stories popping up every now and again, complete with pictures of relaxed, smiling faces. People who have managed to retire at the age of 40, 45 or 50. With more than just a touch of the green-eyed monster you eagerly read their stories. Then only to discover that they sold their houses, bought a van and camped in their all too kind neighbors garden for a decade or more. This isn’t something that you’d entertain. Isn’t there an easier more appealing way to achieve the dream of early retirement? There is indeed.

I was age 40 when I made the decision to do whatever it took to retire young. Retiring early doesn’t necessarily mean living like a peasant for your remaining working life, eating gruel and never switching on your heating (although this is an option!) Early retirement means planning, planning and more planning! You need to know what you will be doing financially every day for the rest of your working life. Whether this is ten or twenty years.

You need to decide when you want to retire. It pays to not be too ambitious. It’s best to settle on an age that realistically gives you enough time to save enough and pay off all of your debt. If you’re in your twenties, you may be able to choose an age beginning with a four. If, like most people reading this post, you are a disillusioned thirty-something, fifty is the ideal age to shoot for.

Pay off all debt to reach Early Retirement Dream

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Debt

Before you do anything else financially, you must get your debt paid off as swiftly as possible. This means getting all of your monetary ducks lined up in a row. You need to be aggressive and utilize any spare cash to pay off credit cards and high-interest loans before you take on your mortgage.

Make a budget and stick to it. Your list of incomings and outgoings needs to be as accurate as possible. Include everything from the blueberry muffin that you pick up as a treat from a well-known coffee chain every Friday to the gourmet trail mix you love to snack on at work. This way, you’ll be able to spot the items that you can forego immediately. You’ll be surprised at just how much this will save you over time.

Any disposable income that you have after paying your bills, food, mortgage and fuel costs must be used to pay off debt. Other than maxing out your company’s retirement 401K match amount, forget the retirement savings for a little while. It’s no good managing to retire at 50 with $500,000 in the bank if you still have $200,000 in debt. Get to work aggressively paying off a large chunk of your high-interest debt every month.

As you see the debt figure decrease, you will be even more motivated to continue. When the higher interest loans and debts have been repaid, you can then think about paying off your mortgage and having an asset in your name. Owning your humble abode outright will be a huge benefit to you come retirement day.

Mortgage free helps turn Early Retirement Dream to reality

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Home Loan

The joy of a home loan is that it tends to be repaid at a much lower interest rate than store cards or secured personal loans. Even so, you need to pay back your mortgage early saving you money on interest and leaving you with some bricks and mortar. Check the small print of your home loan agreement. The chances are that you can pay back ten percent of the remaining balance of your mortgage in over-payments every year. Utilize every penny of this allowance and ensure you don’t go overboard otherwise you’ll be hit with any penalties there may be. By doing this, you could pay off your mortgage in less than half the time of the original term.

If there are no early payoff penalties in your loan agreement then you can pay any extra amount you can without restriction. Being mortgage free at retirement will bring both peace of mind and a much lower retirement lifestyle cost.

Saving money to Turn Early Retirement Dream into reality

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Savings

While you are beginning to shift the mortgage debt, you can start to think about reinvigorating your savings plan. Saving can be hard with the wants and needs of modern life. Here, you’ll have to make some very tough decisions. If you love traveling and take three or four holidays/vacations a year to exotic, far-flung destinations, then this obviously has to stop or be considerably tailed back. Cut back to one annual vacation but make it a good one. Take a couple of weeks overseas being a little bit more financially aware when you are booking your flights and accommodation. Perhaps even cutting back to every other year and travel to great destinations closer to home in the between years.

First class isn’t a realm you should be setting foot in if you want to retire at fifty. Remember, wanting to retire early shouldn’t be to the detriment of your quality of life. It’s all about financial awareness. Finding a sustainable balance between your having purposeful spending discipline while still living a full life.

If you enjoy a busy social calendar, you may need to cut this back a little or adapt the way you meet up with friends. Dinner parties are a great way of cutting the cost of informal meets. Eating out can soon see your savings pot dwindle so save the restaurants for special occasions.

If you have a commute to work every day and need a car, don’t buy straight off the new car lot. Utilize a company discounted car policy if the business you work for has one. If not, buy second-hand and realize that you are using a vehicle to get from A – B, not as a status symbol. If all goes well financially you can leave that for when you are in the joyous throes of early retirement.

Early Retirement Dream needs investments

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Investing

As you build up a little more capital, you may find that you have spare cash burning a hole in your pocket that could work for you more lucratively than if you placed it in a savings account. Consider venturing into the world of real estate. If there’s a new house for sale in your local area or in an emerging overseas market, take a look and consider its potential as a rental. By investing your money in bricks and mortar and seeing a second income from it, you’re making your money work for you more aggressively. Do the math and make sure that any rent you receive covers the mortgage. Real estate generally holds its value, and you could see a high return on your investment when it’s time to sell.

You could go down the stock market or Forex trading route. While lucrative, these forms of active trading investment also carry a greater risk. You can set up dummy accounts with agents and try your hand at the stocks before having a go for real. If you have a good decade before you hit fifty, it might be worth having a flutter on the markets. However, it pays to seek professional advice before launching yourself into the trading world.

The key to sound investing is not putting all of your eggs in one basket and spreading the risk. A varied range of high, medium and low-risk investments can ensure a well-rounded portfolio that should produce fruitful rewards. Most successful early retirees will find investment success in low-cost stock and bond funds.

Last Words

Retiring early is the dream of many yet realized by only a select few. The path to early retirement is bumpy and not for the fainthearted. You need to be proactive and aggressive, and it does involve some personal sacrifice. However, you need to weigh up the pros and cons of altering your lifestyle for the betterment of your early twilight years. It is a major life changing commitment. But by heeding this advice, you’ll be well on your way to a prosperous early retirement.


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Planning Your Best Future Imaginable

One of the most exciting things about getting older has to be planning for retirement. It’s no use saving up without any idea on how you want to spend those precious years of your life. You don’t want to shoot too low either. Why would you say you wanted to go on one vacation a year, if you’d like your whole retirement to be a vacation?

 

Here are some tips that will help you to begin planning your best future imaginable:

Picture Yourself Without Limitations

To get an idea of where you really want to be in the future, you need to picture it, without any of the limitations you may have now. For example, you might want to sail in your own private boat or cruise the country in a sports car. But you fail to even entertain that idea because you feel money will be an issue, or you just won’t be able to for whatever reason. The old saying, ‘where there’s a will, there’s a way’ really stands here. If you want something enough, you can have it. You can find numerous ways to achieve what you want, but you first have to believe that it is achievable. No ifs, no buts, no coconuts! Start dreaming wildly and putting together a picture of what your future will look like in an ideal world. No limitations. Go!

 

Come Up With Ideas

Now that you know what you really want your future to look like, come up with ideas. Sure, you might be used to a fancy lifestyle with a nice expensive car or house now, but if you could downgrade your car or downsize your house and cut back on spending to achieve your dream future, wouldn’t you rather do that? Know the numbers you’ll need to achieve what you really want. Do the calculations. Now, start working out how you can put more money away.

It’s a smart idea to figure out how you can continue making money once your retirement has taken place too. That way you don’t have to just rely on what you’ve earned and saved from your career. Do your research and be smart – the internet has a plethora of free information out there, as well as affordable courses you can take to help you earn money online, from anywhere in the world. For example, you could sell things on Amazon without having to lift a finger once you’re set up, and make a decent living out of it. Retirement is the perfect time to reinvent yourself and pursue any opportunities you are passionate about. All you have to do is be prepared to teach yourself something new. Anything is possible!

Planning Your Best Future Imaginable

 

Do The Sensible Stuff

While you should dream big and come up with smart ideas to help you to earn more money, you need to make sure you do the sensible stuff too. Besides using a reasonable savings withdrawal rate and planning for possible long-term care in your old age, also look into life insurance for seniors over 70 if you have people who would struggle without you, should something happen. Would you want your spouse/children to be lumbered with things like funeral expenses as well as the sadness of losing you? Probably not! Planning for the future in the best way possible means taking care of those you love too. Don’t forget it.

Your future can be brighter than you think!


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Want to Retire Confidently? Set A Retirement Savings Target

It’s no wonder that many people fall short with retirement savings. They have no idea what they need. It would be impossible to know if you are on track without having a retirement savings target to shoot for. People tend to fall into three categories when it comes to retirement savings. The confident, the worried, and the clueless. One way or another, retirement will eventually happen to everyone alive. Wouldn’t you prefer to know you’re doing everything you can for a better retirement?

Cluelessly entering into retirement should be the last thing anyone wants. Moving from the clueless to the worried class of retirement preparedness is a necessary step in the right direction. A little fear can go a long way in lighting a fire under one’s keister to take positive action. For retirement confidence, the sooner you set your retirement savings target the better.

Sadly, Too Many Are Clueless About Their Retirement Savings Needs

Want to Retire Confidently? Set A Retirement Savings Target

The recent Merrill Lynch/Age Wave study results clearly shows that people don’t know how much money they need to save for their retirement. For people age 50 and older, only 27% felt prepared financially for funding their retirement for 10 years. Worst than that, 81% didn’t know how much they needed saved to fund their retirement.  

This isn’t just an American phenomenon. In Great Britain the Pensions and Lifetime Savings Association found similar findings in their studies. They found that 78% didn’t know whether their retirement savings were on track to meeting their retirement funding needs.

Setting A Retirement Savings Target

There are a lot of calculations and unknowns that come with retirement planning. Certainly seeking help from a trusted Certified Financial Planner should be considered. Below is a basic and simple approach to finding a base. This base should be considered only the lowest retirement savings target to shoot for.

Step 1- How Much You Will Need

The first order of business in setting your retirement savings target is knowing how much income you need to pay for your essential living costs. Think housing, utilities, grocery, transportation, and insurance. Get intimate with your budget. Figure out your minimum lifestyle needs. Based on that amount also add to it a proper percentage for taxes.

Step 2- Inventory Your Guaranteed Retirement Income

Next is listing all anticipated guaranteed retirement income like Social Security or other government pension scheme. That also includes any work related pensions you have or will earn. This will require requesting a current estimate of your future benefits and at what age you will be eligible for the benefit.

Step 3- Determine The Amount Your Retirement Savings Must Cover

Now subtract from your essential living costs the guaranteed retirement income amount you will receive. This result is what will be used to set your base retirement savings target. The target is the estimated amount you need your retirement savings to fund your lifestyle essentials.

Step 4- Calculating Your Base Retirement Savings Target

The final calculation is using the much discussed safe 4% retirement withdrawal rate. It isn’t as favored as once was. But it allows a simple equation for setting our minimum retirement savings target. Simply multiply your funding figure by 25. This result is the amount you should set as your minimum retirement savings target.

Example: Monthly base essential living cost $2500 – Social Security $1200 = $1300 X 12 months = $15,600 a year X 25 = Base Retirement Savings Target $390,000.

If you plan on retiring before you begin receiving any guaranteed retirement income then make sure the amount needed during your early retirement years is added in to your target amount.

This is an Estimated Base Retirement Savings Target and Not Gospel

Congratulations, you have just figured out your scrape-by retirement savings target. Understand that whatever you come up with in this calculation that you should save much more. It only used essential living costs. There are many unknowns that we will face in retirement. One-time large financial hits occur throughout our lives and will do so in retirement. Healthcare, inflation, and even our longevity are unknowns that must also be accounted for.

We should also include wanting to save for more than just living essentials and add some fun in our retirement. The above approach is only the closest savings target to hit. Other savings targets should be set beyond it to aim for. Get into the practice of running your numbers through a good retirement calculator as you go. It will help you to fine-tune your retirement savings target. Then it’s all about saving and investing as much as you can to meet it and beat it.

What To Do If Your Base Target Amount Will Be Missed

When your best savings efforts isn’t going to be enough then hard choices must be made, and the sooner the better. If savings targets will be missed under your current situation and future projection then consider doing anything you can to cut your essential living costs.

There’s frugal living, downsizing your home and lifestyle, debt elimination by any means, planning on relocating to a less expensive place in retirement, etc.

Anything that can be done long before retirement will mean freeing up more money to allocate toward retirement savings. It also reduces your target savings amount needed. Last but not least is delaying your retirement for as long as you can. IF YOU CAN.

Missing the target means figuring out how to live on only your Social Security and/or other pension scheme for what could be a 30 year or longer retirement..

It is Always Better To Be Informed

When it comes to retirement, keeping one’s head in the sand thinking ignorance is bliss is a huge mistake. So is the often “I plan to work until I die” retirement plan. Many people end up retiring earlier than they planned due to job loss, health reasons, or having to care for a family member.

The simple scrape-by retirement savings target calculation moves us from clueless to worried status. But taking positive steps forward based on knowledge, preparation, and action reduces fear. It gives us a chance to correctly save and track progress for our inevitable future. Once we can see that we are on our way to meeting even our base retirement savings target we can have the peace of mind that comes with any level of retirement confidence and hopefully long before we retire.


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Holiday Season: Time To Think About Home Security

The fast approaching holiday season means many wonderful things, celebration, good food, and most importantly time with loved ones. However, this oncoming season for many people often means time spent away from home, visiting family or vacationing. Especially for retirees who are able to be away for extended lengths of time. While this is wonderful, this also means our homes are left vulnerable to theft and damage. Don’t let burglary ruin your holiday season, prepare yourself and your home now by thinking about your home security.

Know the home burglary facts –

Break-ins can happen year round but we should be especially careful around the holiday season. Many of us go out of town and leave clear signs we are away this time of year. Many break-ins happen because of things like piling up newspapers or lights not going on or off.

Even for those of us who stay close to home during the holidays there is still burglary risk. Most of us will be away from our homes for what can be many hours doing everything wonderfully holiday related. Of course burglars know this so it’s crucial to know the facts so that you can prepare for the worst-case scenarios.

Be proactive to reduce burglary risks –

We can do simple things like set up automatic light timers, trim our landscaping for unobstructed views from the street or neighbors, properly install deadbolt locks, and when away overnight setting vacation holds on our mail and newspaper deliveries.

When expecting deliveries from Amazon or other online retailers we should be careful to be home or have a neighbor remove packages quickly. Not only are those porch sitting packages a huge attractant to thieves for the items themselves, it’s also a clear sign to burglars that we aren’t home.

We can also move our valuables out of our master bedrooms where thieves go first and put them in a floor bolted safe. At least move valuables to a less likely place in our homes hoping that their need to be in and out quickly means they don’t find them.

Time To Think About Home Security

 

But will it be enough?

These things may give thieves pause in targeting our home or cause them enough time delay to at least lessen the loss from theft. However, that may not be enough as there is no guarantee it will work. For some of us, having additional home security should be considered. Not only to reduce any loss from theft but to provide additional peace of mind. There are a lot of home security system providers out there to choose from with varying levels of price, options, and service.

Know your home security needs –

Many people want a home security system that is pretty hands-free. If this is true for you then look for a system that is based around home automation. A good system should be easy to install, easy to use, and easy to understand.

It should cover:

  • Intrusion – Broken windows, doors, glass, etc.
  • Environmental – Fire, flood, etc.
  • Surveillance – Cameras
  • Life safety – Life alert and panic buttons

All of these should be covered to be a well-rounded home security system. If you need help identifying your needs or want more information this resource can be very helpful.

Know what to look for in a home security provider –

When it comes to protecting our homes we want transparency and clarity. When dealing with a service provider make sure to watch for things like transparent pricing and good customer support. Aside from the system itself, that should be another top priority in choosing the right home security provider for you. Since you will be trusting this system and these providers with the safety of your home and your family, they should check every box on your wish list.


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Cryptocurrency: Rocket Fuel for Your Retirement Fund?

The risks and the gains of Bitcoin are becoming increasingly well-known as this previously under-the-radar cryptocurrency hits the mainstream, with everywhere from specialized exchanges down to your local pizza place now trading in it. But if income tax is making a hole in your retirement funds, then this unregulated, untaxed market – even with all its attendant risks – may begin to look attractive.  Earning Bitcoin is becoming more of an option for growing your overall portfolio, not something to go all-in with. But what are the best ways to make it pay? Here are some of the easiest:

CryptoCurrency: Rocket Fuel for Your Retirement Fund?

Join a mining pool

 

Traditionally, the way to earn with Bitcoin was through ‘mining’ – solving sophisticated mathematical algorithms to create new ledger blocks. However, those days are probably over now. You will need to invest in a Bitcoin mining pool to get access these days, as the current algorithms are too complex to be processed on a home PC and require specialist hardware that harnesses the processing power of many computers. A Bitcoin mining calculator can help you work out how profitable this might be.

 

Create a faucet

 

Bitcoin ‘faucets’ are basically websites that give away micro amounts of the currency to their users, and earn revenue through hosting advertising. The business model is referral-based, generating high-volume traffic to create more ad clicks. This can be done ‘out of the box’ with no experience in coding needed, just a domain name and website creator, plus a micro wallet payment processor service like FaucetHub. Once built, monetize the site through a provider like Google Adwords or spend time building affiliate revenue streams, where you make a small percentage of commission on referrals.

 

Invest in funds

 

It’s now possible to invest in funds that themselves invest in bitcoin. Values are increasing and have been known to double in a matter of months. So although there are definite risks, there are also significant gains to be made by doing this. With a finite supply and tightly regulated production, in theory, Bitcoin should always gain in value over time. There are other cryptocurrencies backed by global conglomerates to invest in such as Ethereum  and you can even set up an ethereum IRA online.

 

Become a Bitcoin lender

 

Becoming a lender is another way to get a slice of the Bitcoin action. Buy up some currency from an exchange, and then lend to another party with interest.  Lend either with no collateral and higher returns or secured against something for a lower interest rate. However, this should be approached with caution due to the lack of market regulation. Cryptocurrency is not part of any insurance scheme or regulated by any official bodies.

 

Accept payments in Bitcoin

 

The other channel is to add Bitcoin to accepted payment methods for whatever goods or services you can sell. But obviously, this depends on being able to effectively market whatever you need to in order to create the wealth. Bitcoin has brought with it some new entrepreneurial opportunities as it removes a lot of the barriers to conducting global business by virtue of its totally digital format.

 

Although its newness makes it a fairly high-risk option, Bitcoin is becoming increasingly mainstream. For a savvy investor, meaning knowing when to get in and get out, there may be opportunities there to make swift gains.

Can cryptocurrency be rocket fuel for your retirement fund? I still have a lot of research to do before I can honestly answer that. But with knowledge comes opportunity and understanding whether something is too risky to invest in.


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Starve The Tax Monster 2: Retirement Tax Strategy Reloaded

My Early Retirement Tax Strategy has always been to manage my retirement income to pay the lowest possible tax rate and never get a tax refund. My Starve the Tax Monster-2 tax strategy manages restricted tax withholding. This year I will push the amount I’ll owe to just under the IRS penalty threshold. I’m starving the tax monster until it’s dinner time, the income tax deadline mid April.

Starve The Tax Monster 2: Retirement Tax Strategy Reloaded

My Retirement Tax Strategy, Reloaded to Withhold The Least Possible

I just can’t allow myself to ever overfeed the tax monster just to wait for it to regurgitate the excess to me once it gets around to it. I’ve always felt that using the federal government as an interest free savings account isn’t financially smart. But this year my motivation and strategy is amplified and more of a mini personal protest. Not only will I make sure I won’t overpay for a refund, I am pushing the amount I will owe to the limit. The plan is to write a last minute larger check to settle my taxes.

Last year I posted my 2016 Starve the Tax Monster early retirement income tax plan when I found that I over withheld federal taxes on my IRA distributions. I took advantage of my withholding mistake and painlessly increased my Roth holdings and made tax withholding changes for the next year.

This year it’s all about my disgust with the fraud, incompetence, and the waste running amok. I can’t change or control much in any of this nonsense that’s going on. But I can control how I pay my owed taxes for the year. I might as well earn some interest on my delayed tax payment money too.

They Finally Got My Goat

There a couple of things that pushed me toward this retirement tax strategy.

First the Equifax hack.

I established a credit freeze at all three credit reporting agencies to help stop fraudulent loans against us. But I can’t stop a fraudulent income tax filing against my and/or my wife’s Social Security numbers. The IRS says to file early for your refund before any fraudsters do. Any fraudulent tax returns against a Social Security number will result in the legit taxpayers experiencing huge delays in their refunds. Forget that. I will just send my check in by the filing deadline. If the IRS paid out a fraudulent refund in error to some jack-wad then they can work that out on their own time and money.

Second, I’m somewhat annoyed about all the White House travel spending waste.

From Cabinet members private and chartered plane issues to the VP Pence football game political stunt. Not to mention the cost of all the President’s weekends away from Washington spent golfing at his properties. They always do what they are going to do. But I don’t have to like it or go out of my way support it.  

Lastly, I think the proposed tax reform clearly favors the rich and corporations and frankly it stinks.

Even though it is far from law, it shows their intent and priorities. As far as I am concerned they are simply tossing peanuts to the middle class and the poor.

Legally Starving the Tax Monster

As I wrote in last year’s starve the tax monster post,

I use the term monster because it will happily over eat without squabble but will hunt you down and destroy you if you don’t feed it what it thinks you owe. I have to pay the tax monster something to keep it off my back but not more than I have to pay. It’s better that I manage my money than trust the monster with it.”

Obviously not paying taxes will get you in big trouble with the tax monster. Fines and interest are added to your tax obligation as penalty. Go too far and prison is also a possibility. There are also interests and penalties for underpaying your taxes. My retirement tax strategy walks the line without crossing the underpayment penalty rules. The rules state you can avoid underpayment penalty if after completing your income taxes you:

  • Owe less than $1,000,

Or if you owe more than $1000, the lower of-

  • Paid at least 90% of the tax you owe for the current tax filing year through withholding or quarterly estimated payments.
  • Or your tax withholding/payments are equal to 100% of your previous year’s tax obligation.

Figuring Out The Year’s Tax Withheld vs. Estimated Obligation

It’s late enough in the year to make a good estimate of this year’s taxable income. I run that estimated 2017 amount through the 2016 tax software I used. This gives me my approximate 2017 tax obligation. By looking at what tax has been withheld and scheduled to be withheld I came up with my probable 2017 tax filing result. I simply had a lot of room to increase my underpayment amount before the year ends.

My 2017 Retirement Tax Strategy

My retirement tax strategy adjustment for this year is to stop my IRA federal withholding for November and December. I will come in owing just below the $1000 penalty threshold. Stopping the last 2 months of tax withholding will increase the amount they will have to wait for. I will file my taxes and send a check by the April 15th tax filing deadline.

Delaying payment of up to $999 to settle my taxes isn’t much, but it is about 30% of my yearly tax obligation. Frugal living and managing income for low taxes has it’s benefits.

I simply keep invested and save the money that I didn’t withhold as taxes. In the whole scheme of things financial, the amount doesn’t add up to much, but some interest/dividends is better than nothing. Mostly I just get satisfaction delaying the monster’s feasting and overeating my money right away.

My 2018 Retirement Tax Strategy

My SEPP 72t ends this year and I will be giving myself a raise for 2018, making my taxable retirement income higher next year. I also ran that increased amount through the tax software to estimate my 2018 tax obligation.

Based on my tax software test results I will restart a 10% federal tax withholding from my 2018 retirement income in July.

Note: I do this stop and start withholding because my IRA fund holder only allows for federal tax withholding of at least 10% from distributed funds. If they could do it I could easily set the withholding rate at 5% year-round. That would also accomplish the same starve the monster retirement tax strategy.

Next October I can run the numbers again to see if my 2018 income and tax calculations are still valid for owing either just under $1000 in taxes, or having withheld 100% of this year’s lower retirement income tax obligation. Based on the results I can make necessary tax withholding adjustments.

Words of Caution

The IRS expects that we pay as we go. You can’t pay your taxes on the last month or two for the year or they could penalize you for underpayment for the first 3 quarters of the year.

The way this retirement tax strategy works for me is I get a 1099R that says the amount of federal taxes withheld for the year. I don’t believe the IRS will go through the trouble to verify it was evenly paid throughout the year if I come in below the underpayment penalty thresholds.

If I was paying quarterly estimated taxes I would instead pay a reduced amount of estimated taxes each quarter. I’d calculate an amount to result in the same end of year underpayment below the penalty threshold.

This retirement tax strategy only delays what I am obligated to pay. It in no way reduces or eliminates my income tax. However, I do reduce my tax obligation by using a tax efficient retirement withdrawal strategy.

Lastly

Starving the tax monster is only a minor financial win if I save the money and it earns interest or dividends. But I am looking at what I call my mini-protest bonus: The huge personal satisfaction I get knowing I am starving the tax monster for as much and for as long as possible.

The big take away:
  • Don’t use the Federal Government as an interest free savings account- Never Purposely over withhold for tax refunds.
  • Know the income tax underpayment penalty thresholds and stay below them.
  • Have the discipline to save/invest your money and pay your tax obligation before the income tax filing deadline.

 

CYA Disclaimer:

I write this article for entertainment and informational use only. In no way should this article be considered professional tax or financial advice on how anyone should handle their income taxes. Do your own research and seek professional help before setting out on your own tax plan. If you freely decide to follow my retirement tax strategy then you do so at your own risk.  


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How to Use Your Money for Fun and Growth

Life is to be lived deeply and passionately, not just dealt with and endured. Whatever money you make, and however you choose to arrange your personal finances, you should always create openings in your life for fun, and set aside a reasonable portion of your income for experiences that make you feel alive. 

Of course, there’s no reason why you shouldn’t kill two birds with one stone. Where you can  have those “fun” activities also serve your personal growth.

Whether you’re on the path to retirement or already retired, here are a few ideas for how to enjoy the best of both worlds.

Money for Fun and Growth

Using Some of  Your Money for Fun and Growth

Learn a skill you’ve always admired

At the core of our memories and recollections of our lives are stories. A great way to develop those stories and add new textures to our life-tales is to learn new skills and put ourselves in new situations.

Everyone has an idea of a skill they’ve always admired or been fascinated by in others. Why not take the plunge and sign yourself up for a class in one of those skill-sets? Whether it be learning how to play the guitar, or starting a course on rock-climbing.

Not only will you have a blast, make new memories, and meet more people. But you might even find new future-income avenues down the line, as an instructor or guide.

Travel

Travel is one of the most uplifting and intriguing experiences a human being can undergo. It’s fun, eye-opening, and if done right, can be an immense source of inspiration.

By travelling to those natural wonders or medieval cities which have always fascinated you, you not only allow yourself to feel truly alive, you also give yourself room to innovate.

The simple fact is that being in unfamiliar environments allows the mind the space to work in unconventional ways. Don’t be surprised if great revelations about the direction of your life, or inspired ideas about your hobbies or career, come to you when travelling.

Invest in self-development

In a sense, this entire article could be said to be about investing in self-development. This point is somewhat more specific, however.

Instead of just investing in activities where self-development is a byproduct, consider also those activities where self-development is the main point, and where fun and satisfaction happily come along for the ride.

By starting a new fitness program, or even a meditation regimen via a service like Headspace, you’ll be directly enhancing your own physical and mental well-being. The renewed sense of vitality you experience as a result can be truly breathtaking.

Meet up with friends

While it’s probably best to avoid spending too much money drinking a bunch of beers down at the bar. Meeting up with your friends should never be seen as just a luxury. It should be seen as something integral to your health and well-being as a human being.

We discover ourselves most deeply in our interactions with other people. The friendships we nurture today can pay dividends in years to come — as a source of happiness, support, contentment, and even opportunity.


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What are the Financial Concerns Preventing Retirement?

Even if you’ve actually managed to pay off your mortgage and all other non-mortgage debts, and you’re quite happy to embrace a more frugal lifestyle, it can still be a little daunting when the time comes to pull the early retirement trigger. In fact, due to the current financial environment we find ourselves in, it isn’t only a daunting prospect for those of us who want to take early retirement, but also for those of us who want to stop working once we reach the retirement age.

A recent article, published by CNBC reported that while the richest 1% of families living in the United States had managed to save $1.08 million for retirement by the end of 2013, the average American family had only managed to save $5.000. This means that for the majority, retirement is a financial burden and not the well-earned rest we’ve dreamed of. Furthermore, apart from the lack of retirement savings, other stressful financial concerns that plague pre-retirees include the following.

the Financial Concerns Preventing RetirementPhoto by Jeff Sheldon on Unsplash

Fear of the unexpected

When the car breaks down, the roof starts leaking, or a family member needs urgent medical care, our monthly paycheck keeps us above the water. However, the thought of having to deal with unforeseen expenses without the safety net of a regular monthly income is enough to keep most of us out of retirement forever.

The thing is that we can never be fully prepared for every eventuality in life, no matter how diligent we are with our savings and how carefully we’ve planned our retirement. Sometimes the thought of the unexpected is actually worse than the reality. One way of slipping gracefully into retirement without living in constant fear of what’s lurking around the corner, is to find ways of cutting back on daily expenses. If we can reduce our monthly payments by moving into a smaller living space, selling the car and spending less at the supermarket, we might actually reduce the pressure we feel as a result of our new financial reality.

Rising health care costs

Health insurance is expensive. There’s no getting around it. As we get older, premiums increase. What is more, proposals like the recent Republican health care bill would have raised premiums for older Americans by more than 750%. Our bodies also tend to be less reliable. Falls among the aging community are common, as too are chronic diseases like diabetes and osteoporosis.

All of this means more medical care, more bills and more financial stress. Of all the things you can choose to cutback on, health is not one of them. Buying a supermarket’s own brand of bread is one thing. Not having health insurance to cover you when needing hospital care is a whole other story.

The disappointing reality of Social Security

For the Baby Boomer generation, Social Security was dubbed an entitlement; an assured benefit that all retirees would simply be guaranteed when the time came to give up work. Today, we know all too well that Social Security is on the financial endangered species list. Most people approaching the end of their working years can’t depend on Social Security, and can instead only really rely on funds they’ve saved and assets they’ve accumulated to see them through the next 18 years or so. As we already know that our retirement funds aren’t going to give us the financial support we need, the absence of the promised Social Security makes it even more difficult to take the plunge and retire completely.

The pressures of inflation and rising living costs

Inflation isn’t helping the situation either. The Social Security’s annual cost-of-living adjustment (COLA) is an increased benefit which is offered to Americans on a monthly basis. There was no COLA for 2015 and only a 0.3 percent increase for 2016. The result? Anyone on Social Security over the past two years has been simply left to battle against the difficulties of inflation on their own. Inflation is making life particularly difficult for retired Americans, with as many as three out of five middle-class retirees outliving their funds when trying to maintain their pre-retirement lifestyles.

Essentially, having cold feet about retirement, early or otherwise, is normal right now, but we must try to avoid allowing our fears from holding us back. Being aware of the instability of our economic environment, our first port of call must be to make adjustments to our lifestyle choices.

 

This Article is a contribution to Leisure Freak from the talented freelance writer Jackie Edwards.

Now working as a full-time freelance writer, Jackie Edwards is also a busy mum of two small children. In any free time she has (which isn’t much) she likes to volunteer and do charity work and take the family greyhound Bertie for long walks.


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