All posts by Leisure Freak Tommy

How Does Family History Affect Your Life Insurance Premiums?

We all hope to retire early and comfortably. Throughout our professional lives, we look for ways to tighten spending in exchange for securing our savings or making new investments. One way that many people look to save money is by making a few lifestyle changes to lower their monthly premiums on life insurance. For example, you can be more frugal by eating healthier, joining a gym, and stopping poor health habits such as smoking. You’ll find many ways to improve your health and lower what you pay for a life insurance policy. However, some factors can be beyond your control.

Your family’s health history is one factor that affects how much you pay in premiums. For example, insurers will check whether anyone in your family suffered from heart disease or experienced a heart attack before the age of 60. These major red flags can cause insurance companies to assume greater risks by insuring you, and you can expect to pay more for a policy.

Knowing that your family health history will lead to higher insurance prices may be discouraging, but don’t neglect the factors that are under your control. If you have a family history of heart problems or similar issues, use it to inform your decision to take up a new form of exercise or add a new healthy meal to your diet.

Test your knowledge with a short quiz to help you learn how family history can affect your life insurance premiums. You can also explore the in-depth FAQ section on for more information about how companies make decisions about life insurance and what you can do to reduce your premiums.

Retiring In Style

Many lives are lived in vain and these are the lives that tend to be followed by regret. When asked about what they wished they had done earlier in life, people in their deathbeds said they wished they hadn’t worked so hard and wished they had had the courage to live a life that felt truer to them.

Luckily, it is never too late to change our habits and still early to start living a more meaningful life. With the below information and a bit of determination, you could also build that courage to make sure every step you take from now will lead to the life you always dreamt of.

retiring in style
Retire in style and spend your life’s third act doing what you have always dreamt of

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Some Ideas For Retiring In Style

Plan the trip of your lifetime

Travelling expands the mind and makes you connect with the inner self you had buried a while ago. Whilst you might think that travelling is something people in their mid twenties to early forties do, it is never too late to dream of sailing seas or hiking trails. Here is Lonely Planet’s Older Traveller Forum to provide you with the inspiration you need!

Invest in your dreamed holiday home

A pad that allows you to be closer to the sea? A second home in Venice? Perhaps an apartment in the sun? If you never thought of looking into these but have always wanted to escape to a faraway destination and make this your second home, now is the time to do some research into it. If you don’t know where to start, Ally Invest Review will help you better inform your financial decisions so you can finally own your home in the sun.

Take an online course

You used to sit and doodle whilst the news at five o’clock were playing in the background. Your family mentioned you could have been a Picasso or a Mondrian but you never had the time to dust off those brushes and sketch. With the thousands of online painting courses now available, this could be the time for you to shine! The Virtual Art Academy offers an online painting course you could take, and like them, there are many more organizations who do so. Get exploring!

Write your story (and share it with the world)

Being a writer is not easy, but it has also never been easier. With thousands of online tutorials on how to write, you too could tell your story. With years of experience behind you, all you need is some time aside and a word processor through which to share your world views and life anecdotes.

Take dancing lessons

George Bernard Shaw famously wrote “we don’t stop playing because we grow old, we grow old because we stop playing”. How you spend your time in retirement is entirely up to you, but dancing might be the perfect option if you wish to introduce a new routine to your life. Even if this is done past your forties, there is still time to learn new steps, so go on, put on your dancing shoes. Who knows? You might even find your perfect dancing partner!


These are only a few ideas to think about. There are all kinds of ways to engage your creativity, your inner explorer, and commitment to personal growth. Retiring in style can also include strengthening relationships and giving back through volunteering.

Retirement should be a time of passion, purpose, and interests. Not one of retreat and withdrawal. Be courageous and a little daring  by striving to live a retirement lifestyle that has no chance of regret. Make retiring in style part of your retirement plan.

My Early Retirement SEPP 72t IRA Ends: How It Worked Out

My last SEPP 72t IRA payment was just delivered. I now close the door on government control over my early retirement funding. For the last 7.75 years I had IRA penalty free withdrawals using what the IRS calls substantially equal periodic payments (SEPP). I thought I would share how the IRA did from its original funding to its last payment to me.

I think this could be of interest whether anyone is considering a SEPP 72t approach to early retirement funding or not. It gives a glimpse into the impacts of investment allocation, a bad investment, and what a rigid withdrawal rate has on an IRA over several years of retirement funding.

SEPP 72t IRA Basics

The SEPP 72t is an IRS rule that allows someone to make pre-age 59 ½ withdrawals from an IRA without having to pay the early withdrawal 10% penalty. Only your normal income taxes would apply.

The IRS 72t rule dictates the withdrawal amount. It is based on current bond interests rates, your age and your life expectancy at the time of beginning the 72t. The idea is that your IRA would survive long enough to fund your retirement for your lifetime.

There are 3 IRS approved withdrawal methods and you can make one withdrawal method change during the life of the SEPP 72t.

The 72t payments must run its course once began for the longer of 5 years or you reaching age 59 ½. In my case the run-time was to age 59 ½, making my 72t in play for 7 years and 9 months to complete my 72t run-time rule obligation.

Run afoul of their rules and the IRS will assess the 10% IRA early withdrawal penalty back to the very first SEPP 72t payment you received plus applicable interest. That applies even if the IRA fails before meeting the obligated run-time length rules. Careful investment allocation is advised so that a market crash doesn’t send the 72t IRA into funding default.

It is for these reasons I used a CFP to set up and manage my 72t IRA. It is advisable to not lockup all of your retirement IRA funds in a SEPP 72t. Always hold some of your retirement portfolio separate from the 72t.


My SEPP 72t IRA Details

My SEPP 72t began February 2010. At that time the IRS allowed 72t interest rate was around 3.5% to use in the SEPP calculation.

Looking today at the allowable set interest rate to use online on the calculator, it seems the interest rate to use is 2.4% for December 2017 and estimated to be 2.54% for January 2018. The approved interest rate changes as bond rates reset.

72t IRA Balance Details

My SEPP 72t began Feb 2010 and ran until Nov 2017 = Obligated run-time 7 years, 9 Months.

72t IRA Beginning balance – $665,000

72t IRA Ending balance – $586,528

The 72t IRA Amounts Paid Out During IRS Obligated SEPP Timeline

72t IRA Early Retirement Income Paid – $260K

72t IRA CFP Fees (estimated) – $39K

Total Amount 72t paid out = $299K

Figuring Out The 72t IRA Results

The first observation is that the 72t IRA is down $78,472  (11.8%) from my initial investment. That may seem odd given the run-up in the stock market since February 2010 to now. There are a couple of issues that I believe addresses this result.

One of my investments (highlighted below) took a 40% dump. This represented a large part of the SEPP 72t IRA $78,472 deficiency when only looking at the beginning and ending totals.

The SEPP 72t withdrawal calculation used a bond interest rate of 3.5% within its algorithm. Bond rates were higher at that time than they are now. This resulted with what was a 5% withdrawal rate of the total funding SEPP IRA. There was no yearly inflation adjustments but this is still far higher than the well discussed 4% safe retirement withdrawal rate. That 4% rate is now challenged as being too aggressive as a safe withdrawal rate. A 5% withdrawal rate clearly has an impact on the portfolio.

The SEPP IRA was conservatively invested and designed to chase yield. It did not benefit as much as it could have had there been more stock exposure. This was done purposely. The rest of my portfolio outside of the SEPP 72t IRA was invested heavier in stocks. The overall portfolio was considered for an appropriate investment allocation when looking at stock to bond and international to US investment ratios. This was also done to avoid 72t default in the event of a stock market downturn.

Even after the above considerations, the SEPP 72t IRA produced enough income and growth to pay out $220.5K overall ($299K paid out minus the $78.5K beginning to ending IRA balance deficiency).

How My SEPP 72t Was Invested

Please note that the 72t IRA had investment changes over it’s 7.75 year run and this is the current (11/24/17)snapshot/reported yield.

Cash = $34,066

Investment Mutual/UIT Funds = $552,462

Total SEPP IRA Value = $586,528

Invested Mutual/UIT Funds

ACETX – INVESCO EQUITY & INCOME $40,509.06 (7.33% of 72t)  Yield 1.76%

BIICX – BLACKROCK MULTI ASSET INCOME INSTL $29,362.14 (5.31% of 72t) Yield 4.5%

DIFIX – MFS DIVERSIFIED INCOME $29,881.61 (5.41% of 72t) Yield 3.2%

FGIYX – NUVEEN GLOBAL INFRA $35,119.09 (6.36% of 72t) Yield 2.76%

FRIRX – FIDELITY ADVISOR REAL ESTATE INCOME $37,563.30 (6.8% of 72t) Yield 4.08%

FSRIX – FIDELITY ADVISOR STRATEGIC INCOME $94,852.42 (17.17% of 72t) Yield 3.18%

MBDIX – MFS CORPORATE BOND $67,315.98 (12.18% of 72t) Yield 3.38%

MLPOX – OPPENHEIMER STEELPATH MLP ALPHA $19,307.78 (3.49% of 72t) Yield 8.1%

OIBYX – OPPENHEIMER INTL BOND $59,600.10 (10.79% of 72t) Yield 4.18%

OOSYX – OPPENHEIMER SENIOR FLOATING RATE $57,604.36 (10.42% of 72t) Yield 4.44%

PXHIX – PAX WORLD HIGH YIELD BOND INSTL $81,346.39 (14.72% of 72t) Yield 5.46%


In Closing

It’s easy to see that a higher IRA withdrawal rate, an investment loss, and a yield focused conservative investment allocation can result in a lower portfolio balance regardless of any prolonged market recovery.

As I move into Phase 2 of my early retirement funding plans I will be using what was learned from the first 7.75 years of my SEPP 72t. I happily look forward to being able to have more control over my retirement account withdrawals going forward.

After considering everything, I do believe this was an early retirement funding success. I have enjoyed this adventure called early retirement much more than I could have imagined.

Using the SEPP 72t IRA rules to allow early access to my retirement accounts without penalty was definitely a successful strategy for my situation.

Working In Retirement – Is It Worth It?


Once we retire, that’s it, right? You are finally able to give up your job and can leisurely sit back and relax. Or is it that simple?

Not all retirees want to give up their job once they hit retirement age. In fact, some even take up another job once they have retired from their regular one. Wondering why that is? Well, there are various reasons. For some folks retirement is the perfect time to pursue new opportunities of passion and interest. But the main reasons many retirees return to a paying job is they need the money or they just get bored with all the free time that retirement brings.

Thinking of calling it quits on your retirement and finding another job? Here are some reasons why it might be worth it.

Working In Retirement

The Benefits of Working In Retirement

Can Keep It Flexible

Lots of retirees enjoy the new lease of flexibility that it brings. They are no longer trapped by their nine-to-five. And it’s now possible to find a flexible job that they can do in their spare time. This is why there are a lot of retirees who are now becoming entrepreneurs and freelancers – the flexible way of working fits into their new lifestyle. You just need to remember to stay highly organized with your working schedule, paystub generator for your payroll, and filing your taxes. Being highly organized and having plenty of free time – they are the best things for helping your new flexible career become a success!

Provides You With A Regular Income

When some people hit retirement age, they are surprised to find that they haven’t saved up enough for their post-work life, despite all of their best efforts. If you find that you are in this situation, then you might be forced to go back to work. Don’t worry, though, even if your pension pot isn’t as big as you were expecting, it should make it possible to only go back to part-time work rather than a full-time job. Even taking on a full-time opportunity in retirement can be enjoyable. Especially if it’s aligned with what you are interested in doing or passionate about. Who knows, it could be the start of a rewarding encore career.

Working In Retirement has social benefits

Social and Personal Growth Benefits

Of course, it’s not just the monetary benefits that people get from going back to work. They also enjoy the social side of having a job as well! In fact, some retirees who feel quite lonely after leaving work choose to find a part-time job just so they have some regular contact with other folk. This is especially the case with retirees who live quite far away from their family.

Aside from this social benefit, working in retirement allows retirees the opportunity to learn new skills they have long admired. Personal growth is a rewarding self-investment that adds immense satisfaction.  

Delay Pension Withdrawals

If you do go back to work after retiring, you won’t have to begin your Government Pension (Social Security) or withdraw from your private pension (retirement accounts) as you will be living off your regular income. At the very least you will be able to withdraw far less. So, you will be leaving most of, if not all, of your pension for a later date, when you finally do retire for good. And, while your pension waits for you to fully begin withdrawing from it, it will be amassing more interest and will grow as a result. So, when you do decide to start making withdrawals, your pension pot will be larger than right at the start of your retirement!


Just because you are now at retirement age, it doesn’t mean that you absolutely have to retire. As you can see, there are a few different reasons why it might be worth returning to work!

Holiday Season Hacks: Christmas Can Be Thrifty

When the holiday season gets into full swing; it can be a challenge to reign-in your finances and keep track of your spending. There will be travel costs, gifts, food, and decorations to invest in, and these can end up spiraling, causing you to head into the new year feeling out-of-pocket and strapped for cash. By the time you get to January; you’ll know that you overspent, but you might not be sure what you’ve bought, and why everything cost so much. Therefore, it’s worth putting some time and effort into your frugal living over the holidays, and focusing on saving money where you can. A little planning and savvy preparation can go a long way.

It’s not about becoming the Grinch of the family over the festive season; however, there’s nothing wrong with making wise financial decisions regarding what and where you spend. If you do it right; nobody in your family will even notice that you’ve made an effort to cut back and pocket the savings, but your wallet, retirement fund, and bank balance will be extremely grateful.

The following are some tips, ideas, and advice for those who want to save their money over the holidays, but still want to enjoy the time with their loved-ones and have a very happy Christmas.


Holiday Season Hacks: Christmas Can Be Thrifty

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Holiday Season Hacks

Plan Your Gift Giving


The cost of Christmas gifts is probably one of your biggest extra-expenses over the holiday season. Therefore, it’s worth working out a set budget for each person, and really sticking to it. Better yet, paying less than expected and saving the excess. Sites like are the perfect place to start, as you can pick up some discounts and special offers that you wouldn’t find in the retail shops, so check them out and do your research to price compare.

Wrapping paper and cards can also add up to a large sum; if you haven’t already, utilize the January sales to stock up on greetings cards, bows, ribbons, and paper so that you never pay full price. Check the attic or your home’s storage closet for anything left over from last year that could be used. Don’t overspend on things that you may already have. You may be surprised at how many things you can find and put to purpose that would later be destined for the recycling bin if unused.


A Homemade And Recycled Approach


Decorations, food, and drink will be next on the list of things you’ll be forking out for over the holidays. Therefore, it’s worth putting some time into using what you already have, or investing in some affordable elements, to create things yourself at home.

Homemade decorations will always look festive and unique and you can get the whole family involved. It’s amazing what you can create with a hot glue gun, some ingenuity, and re-purposed decorations that may have been unused for years. Check out sites like for some inspiration.

The same goes for food and drinks. It can be so expensive buying ready-made edible items. Try and make as much as possible using ingredients in your cupboards and get baking from scratch. The homemade approach will always go down well will friends and family, and perhaps if you’re feeling crafty; homemade gifts is something you can consider too.


Christmas can still be festive and fun, and saving cash during the holidays could even add to the experience. Don’t overspend and instead head into the new year having saved money where you can.

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


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 or

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


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.



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!



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!

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.

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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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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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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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.

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!

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.