Last week, I talked to a friend about a major home improvement project costing thousands of dollars that I have to have done. My friend said she had another friend who delayed her federal retirement because she had to do the same project. My heart dropped because I would be distraught if I had to delay my retirement for a home improvement project.
Off the top of my head, I can think of at least three friends or coworkers who have retired or plan to retire but are having financial difficulty. One friend retired and had to get a full-time job within six months. A coworker has physical issues that affect her work performance; yet, she struggles to come to work every day because she cannot afford to retire. Another coworker’s physician advised him not to work, but he decided to buy a new car instead. Now, he cannot retire.
Years ago, I lived in a neighborhood where I would see my neighbor gardening as I left for work every day. Each time, I thought, “One day that will be me.” I watched coworkers who retired successfully; they brought their lunch to work and bargain shopped. Over time, I, too, learned to squeeze a dollar. I asked people who retired for advice, and the best advice I was given was that credit was for major purchases, i.e. house and a car. Now, if I cannot pay for it with cash, I cannot afford it.
Before I proceed, I want to make something clear. This blog is not for those who can afford to retire but do not want to go home and watch “Doctor Oz.” I will save having interests outside of work for another blog.
According to Forbes, there are many reasons that affect retirement. For brevity, I will only mention what I believe is the biggest contributing factor in the Washington Metropolitan area, i.e. still paying bills and unable to save for retirement.
Every so often, I will attend a retirement seminar, and often, they will mention the cost of living. Currently, the median price of a Washington metropolitan area home is $372,990. I will have to consider this upon retirement, and U.S. News and World Report has a listing for every retiree: The 10 Best Places to Retire on Social Security Alone; Best Places to Retire for Under $40,000; 10 Best Places for the Wealthiest Retirees; the list goes on and on.
One more thing, years ago, I met with a financial advisor who suggested retirement portfolio diversification, i.e. Civil Service Retirement, Federal Employees Retirement System, Thrift Savings Plan, stocks, bonds, savings, etc. If one crashes, you can tap into another. All financial investments carry risks. During the Great Recession of 2008, retirement savings in 401Ks and Individual Retirement Accounts dropped by 50% in just a few days.
Retirement planning takes time, but it is never too early or too late to plan for it. There are steps you can take that will help you secure your financial security no matter what your age. Who knows? In a few years, you, too, could be sitting at home watching, “Doctor Oz.” Then again, let’s hope not.
Cynthia V White is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.