How to Save Money for Retirement

Look for Sales and Save Money
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In cased you missed them, there were some very scary statistics scattered throughout the October, 2011 AARP Bulletin.  In the years since then, things have not changed much.  Basically, they come down to the fact that people are not saving nearly enough money in order to retire.  Here is some of what they had to say:

Families that have a head of household who is between the ages of 60 and 70 have only saved about 25% of what they will need for retirement.  (p. 3)

About 53% of all families in the US do not think they have enough retirement savings in order to have a comfortable retirement.  (p. 28)

In addition, the AARP Bulletin showed the impact that inflation is having on family wealth.  Between 1989 and 2009, the full time income for a man increased only about 3%.  Meanwhile, the cost of a college education for a child increased 73%, the cost of health insurance premiums rose 182%, and the amount of debt being carried by the average middle class family rose 292%!  (p. 28)  No wonder many of us feel that we are working harder than ever, but have less to show for it.

What can we do?  As impossible as it may seem, we all need to learn how to save money before we retire.  Everyone who is 50 years old or older should sit down and take a realistic look at how much income they will have when they retire, and then begin living now as close to that amount of money as possible! At the very least, you should try to live on only 90% of your income and save the other 10%.  If you cannot live on 90% of your income now, how do you think that you will live on just half of it ... which is what is going to have to millions of Baby Boomers!?

For example, let's say the head of the household in your home will receive approximately $2,000 a month from Social Security when they turn 67.  Their spouse will be eligible for an additional $1,000 a month in spousal benefits from Social Security when they turn 67, too.  If you expect to have $100,000 in your IRA or 401K by the time you retire, that could consider investing in a 20 year annuity and you would receive $400 - $500 dollars extra a month, at today's rates.  This comes to $3,500 a month in potential retirement income, including Social Security and investment income.

What is your current cost of living?  If you spend a lot more than $3,500 a month, you should start making adjustments to your current expenses to see if you can bring them down.  What will you need to change?  Will you need to move to a less expensive home or apartment, buy a less expensive car, or pay off your loans?  Perhaps you need to shop more carefully, by buying less and purchasing what you need when it is on sale. 

If you simply cannot bring down your expenses after retirement, is it possible that you could increase the amount of money you are putting in your IRA or 401K, so that you will have more retirement savings to invest when you stop working? Where can you come up with the extra savings? Are there services you could eliminate or reduce now, such as cable TV or your house telephone line?  Whatever you decide to do, start making the changes now, while you are still working.  The longer you wait, the more difficult it will be to take the necessary steps to have a balanced budget after you retire. 

With the right retirement planning, you can turn things around and take control of your retirement years.  It really is possible for you to become part of the 25% of people who have adequately planned and are prepared to retire!

If you are interested in more detailed information about retirement financial planning, where to retire, possible health issues you might encounter, family relationships and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional articles.

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How to Dispose of Leftover Medicine

Leftover Pills Should Not Be Flushed
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What do you do when you have old or leftover medication?  Where should you dispose of unused drugs?  Many people simply toss their medications into the trash, or flush them down the drain.  However, this is creating serious consequences to our water supply and, consequently, our health. 

When the U.S. Geological Survey studied the ground water and the surface water in 25 states and Puerto Rico they discovered drug contamination in 96% of the samples they took.  Among the medications found in the water were hormones (from birth control pills, estrogen replacement drugs, etc.), steroids, codeine, ibuprofen, acetaminophen, antibiotics, and antimicrobials.  So, if you shouldn't simply toss the pill bottle into the trash, and you shouldn't flush them down the toilet, what other choices do you have?

What to do with Unused Medications

Your first choice is to use all the medication that is prescribed by your doctor, so that you have nothing left to throw away.  However, we all know that this is not always possible.  Sometimes a prescription is not working and a doctor changes it.  At other times, the doctor changes the dose, just after you filled the prescription.  (That has happened to me several times.)  What should we do with the leftover medicine then?

When this happens, you should put the medication in a sturdy and securely sealed container and put it deep in your trashcan where children and pets cannot reach it.  You can also "treat" the drugs so that children and animals will not eat them.  For example, you could add salt water, ashes or dirt to the pills before sealing them into a container.  You may want to remove your name and personal information from the pill bottles, too.

Another option is to take your leftover medications to a household hazardous waste collection center or special event, especially if the medicine you are trying to get rid of is a controlled substance such as codeine or a steroid. 

You may also want to check the website nodrugsdownthedrain.org for more information on how, where and why you should dispose of any drugs.  Since we Baby Boomers take a lot of medications, and will probably take even more as we age, we have a responsibility to learn how to dispose of our surplus medications safely.

Please make sure you are not doing anything to further contaminate our water supply.  Please do NOT flush drugs down the toilet or the drain.

If you are looking for more information about medical issues, retirement planning, where to retire, etc., use the tabs or pull down menu at the top of the page for links to hundreds of additional articles.

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Cheap Places to Retire

Texas Has a Low Cost of Living,
But a Few Other Places Do, Too!

Are you looking for an affordable place to retire?  Where can you live cheaply and comfortably?  Kiplinger Magazine looked into this issue in their September 21, 2011 issue.  Although this was a few years ago, the places they recommended are still good choices.  Below are some of their findings, along with my personal experience with some of these places.

Texas is one of the cheapest places to live in the United States.   When Kiplinger listed five of the most affordable communities in the US, three of them were located in Texas.  If you are trying to figure out how in the world you are going to be able to survive on your Social Security alone, you may want to do additional research on the communities listed below to see if there is one which appeals to you.

My husband and I lived in Texas for over 25 years, and raised our family there.  I also sold real estate in Texas, and know a great deal about the large, beautiful homes you can purchase there for reasonable prices. We have visited several of the communities on this list, so I have included my own knowledge of these towns, in addition to what Ms. Browne had to say in Kiplinger.

It is important to expect that there will have been some inflation, with higher wages and prices than those listed below.  However, this does not change the fact that these locations offer good retirement opportunities for many people.

Here is the Kipplinger list, along with some basic facts:

Brownsville, Texas was the cheapest place to live on their list, according to Kiplinger.  The median household income was only about $30,000 in 201l and the average home price was $209,000.  Brownsville is right on the Texas border with Mexico, but it is also near the Gulf of Mexico and South Padre Island.  We took our daughters on a vacation there, and rented a condo in a gorgeous gated community.  There are numerous golf courses and sweeping beaches.  Because of the proximity to Padre Island, there are plenty of upscale restaurants and hotels.  However, rents in Brownsville averaged less than $700 a month in 2011 for typical apartments, according to the Kiplinger article.  There is one thing you should know: you need to be prepared for the fact that it gets VERY hot in the summer.  However, the winters are mild and pleasant.

Pueblo, Colorado was the second cheapest place to live on their list and is an ideal location if you want to be in the mountains.  The median household income was about $41,000 in 2011 and home prices averaged about $200,000.  This city of 153,800 people has a wide variety of activities, and yet is very affordable.  The winters can be tough, however, if you are not used to dealing with ice and snow.

Ft. Hood, Texas hasd a median household income of $46,200 in 2011 and an average home price of $220,000.  This town is about 60 miles north of Austin, and is on the edge of a major military base.  As a result, it has an unusually large population of young adults.  However, apartments rented for only about $650 a month.  The area around Austin is very popular in Texas.  Not very far away you will also find Sun City, Texas, which is located in the town of Georgetown.  Many Texans like to retire to the Texas Hill Country, as this region is known.  It is affordable, friendly and a spot where most people can live comfortably on either their military pay or their Social Security benefits.  (Below, you'll notice that Austin, Texas came in number 10 on Kiplinger's expanded list.)

Fort Smith, Arkansas is a charming town on the border of Arkansas and Oklahoma.  The median household income was $37,000 in 2011 and home prices averaged about $250,000.  The average apartment rent was just $500 a month!  This is a comfortable Midwestern town that doesn't get as cold as Pueblo, Colorado in the winter, nor as hot as Brownsville, Texas in the summer.

Sherman, Texas came in on the Kiplinger list at number five.  This town is about 60 miles north of Dallas, near Dennison, another popular retirement location.  Houses averaged about $220,000 in 2011 and apartment rents averaged around $650.  I have driven through this sleepy town many times.  Although it is not quite as metropolitan as some of the other communities in Texas, you can always drive to the large cities of Dallas, Fort Worth and Arlington if you seek entertainment ranging from Six Flags, baseball games, elegant restaurants, country western bars, and top-notch symphony orchestras!

Rounding out the Kiplinger list of top 10 cheapest places to live in the United States are:  Springfield, Illinois; Waco, Texas; Fayetteville, Arkansas; Austin, Texas; and Springfield, Missouri.  Of these, Austin, Texas is one of the most popular communities for retirees, as well as young adults.  With several colleges and universities in the city, as well as its location as the state capital of Texas, you will find innumerable activities to keep your mind stimulated and your body busy.  Sun City - Texas in Georgetown is only about 30 miles north of Austin and is an exceptional retirement community.

If you are interested in more retirement information including where to retire, medical concerns for retirees, financial planning, family relationships, Social Security, Medicare and more, use the tabs or pull down menu at the top of this article to find links to hundreds of additional articles.

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photo courtesy of morguefile.com

How to Avoid Debit Card Fees Charged by Your Bank

Bank ATM
Photo from Morguefile.com

As though Americans need more bad economic news, some of the large banks plan to start charging $5 a month to their customers who use their debit cards to make purchases.  The largest bank to announce that they are going to take this action is Bank of America, according to a 9/29/11 Associated Press article titled, "More bad news for bank customers: Debit card fees."

It appears that, even if you restrict your debit card just to purchasing groceries, you will still pay an extra $5 a month as a fee to your bank if you are a Bank of America customer.  In addition, according to ABC news, other banks such as Wells Fargo are also test marketing these fees.  However, the fees are so controversial, that some banks may change their minds.

If you bank does decide to start charging these fees, you could always switch to another bank or use a credit union.  If you stay with your bank, you have a few options for avoiding these fees.

How to Avoid Debit Card Fees Assessed by Your Own Bank

* As mentioned above, if your bank begins to charge unreasonable fees, you can change banks or begin to use a credit union.

* Another possibility is to stop by your bank's ATM machine and take cash with you before you head to the grocery store.  However, it can be scary to carry around a lot of cash.  In addition, you could be embarrassed if you spend more money than you estimated, and end up short of cash.  Also, if your closest ATM is not convenient, you will waste gas by doing this extra driving.

* Another option is to go back to writing checks for your groceries and other purchases.  For the past decade, banks have worked hard to ween all of us from check writing, by encouraging us to use debit cards and pay our bills online.  However, if you only make a few purchases a month, writing checks may be cheaper than the $5 debit card fee.

* It might also be preferable for some people to use a credit card for their purchases, instead of a debit card. One word of warning on this approach:  If you are doing this to save money, you should be sure to pay off the entire balance at the end of every month.  If you carry a balance, and pay interest, it will wipe out anything you might save by trying to avoid the $5 debit card fee.

* One possibility, at least with Bank of America, is to maintain a minimum average balance of $1,500 in your checking account.  They have said that accounts with that minimum balance will not be charged this fee. Of course, you will not earn interest on this money, so that will cost you money in a different way.


If you are looking for more information of use to retirees, click on the tabs or pull down menu at the top of the page for links to hundreds of additional articles about where to retire, medical issues, financial planning and more.

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